<PAGE>
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 2001
 
                                                      REGISTRATION NO.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 --------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                                 --------------
 
                                 OMNICELL, INC.
             (Exact name of registrant as specified in its charter)
 

<TABLE>
<S>                             <C>                             <C>
           DELAWARE                          3571                         94-3166458
 (State or other jurisdiction    (Primary Standard Industrial          (I.R.S. Employer
              of                 Classification Code Number)         Identification No.)
incorporation or organization)
</TABLE>

 
                                ----------------
 
                             1101 EAST MEADOW DRIVE
                          PALO ALTO, CALIFORNIA 94303
                                 (650) 251-6100
 
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)
                                ----------------
 
                                Sheldon D. Asher
                     President and Chief Executive Officer
                             1101 East Meadow Drive
                          Palo Alto, California 94303
                                 (650) 251-6100
 
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                                ----------------
 
                                   Copies to:
 

<TABLE>
<S>                                               <C>
         Robert J. Brigham, Esq.                             Gary J. Kocher, Esq.
           COOLEY GODWARD LLP                             PRESTON GATES & ELLIS LLP
          Five Palo Alto Square                          701 Fifth Avenue, Suite 5000
           3000 El Camino Real                          Seattle, Washington 98104-7078
     Palo Alto, California 94306-2155                          (206) 623-7580
             (650) 843-5000
</TABLE>

 
                                ----------------
 
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
 
   As soon as practicable after the Registration Statement becomes effective.
                                ----------------
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                                ----------------
 

                        CALCULATION OF REGISTRATION FEE
 

<TABLE>
<CAPTION>
       TITLE OF SECURITIES              PROPOSED MAXIMUM AGGREGATE                  AMOUNT OF
         TO BE REGISTERED                   OFFERING PRICE(1)                  REGISTRATION FEE(2)
<S>                                 <C>                                 <C>
Common Stock......................             $69,000,000                           $17,250
</TABLE>

 
(1)  Estimated solely for the purpose of calculating the amount of the
      registration fee in accordance with Rule 457 under the Securities Act of
    1933, as amended.
 
(2)  $17,002 offset, pursuant to Rule 457, by previously paid registration fee
      of registrant's registration statement, No. 333-35258.
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
                  SUBJECT TO COMPLETION, DATED MARCH 14, 2001
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE SECURITIES AND EXCHANGE COMMISSION DECLARES
OUR REGISTRATION STATEMENT EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
PRELIMINARY PROSPECTUS
         SHARES
 
OMNICELL, INC.
 
                          [LOGO]
 
COMMON STOCK
$    PER SHARE
 
----------------------------------------------------------------------
 

<TABLE>
<S>                                            <C>
-   Omnicell, Inc. is offering                 -   This is our initial public offering and
    shares.                                    no public market currently exists for our
                                                   shares.
-   We anticipate that the initial public      -   Proposed trading symbol: Nasdaq National
    offering price will be between $    and        Market - OMCL.
    $    per share.
</TABLE>

 
                      ------------------------------------
 
THIS INVESTMENT INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 

<TABLE>
<CAPTION>
                                                              PER SHARE      TOTAL
                                                              ---------   ------------
<S>                                                           <C>         <C>
Public offering price.......................................  $           $
Underwriting discount.......................................  $           $
Proceeds to Omnicell, Inc...................................  $           $
</TABLE>

 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
THE UNDERWRITERS HAVE A 30-DAY OPTION TO PURCHASE UP TO       ADDITIONAL SHARES
OF COMMON STOCK FROM US TO COVER OVER-ALLOTMENTS, IF ANY.
 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF ANYONE'S INVESTMENT IN THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
 
U.S. BANCORP PIPER JAFFRAY
                         CIBC WORLD MARKETS
                                                                        SG COWEN
 
               THE DATE OF THIS PROSPECTUS IS             , 2001.

<PAGE>
                               INSIDE FRONT COVER
 
Clinical infrastructure and workflow automation solutions for healthcare
(header, centered)
 
Omnicell Patient Medication Profiling screen shot image (upper left)
 
Clinical Pharmacology screen shot image (center left)
 
Person and one automated dispensing cabinet (center right)
 
OmniBuyer application screen shot (lower left)
 
Omnicell Logo image (lower right)

<PAGE>

                                    SUMMARY
 
THE ITEMS IN THE FOLLOWING SUMMARY ARE DESCRIBED IN MORE DETAIL LATER IN THIS
PROSPECTUS. THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION AND DOES
NOT CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER. THEREFORE, YOU SHOULD ALSO
READ THE ENTIRE PROSPECTUS, ESPECIALLY "RISK FACTORS" AND THE CONSOLIDATED
FINANCIAL STATEMENTS AND NOTES, BEFORE DECIDING TO INVEST IN SHARES OF OUR
COMMON STOCK.
 
OUR BUSINESS
 
We provide an integrated suite of clinical infrastructure and workflow
automation solutions for healthcare facilities. These solutions include pharmacy
and supply systems, clinical reference tools, an Internet-based procurement
application and decision support tools. We sell and lease our products and
related services to a wide range of healthcare facilities such as hospitals,
integrated delivery networks and alternate care facilities, which include
nursing homes, outpatient surgery centers, catheterization labs and clinics. As
of February 28, 2001, we had approximately 18,000 pharmacy and supply systems
installed in over 1,100 healthcare facilities. In 2000, we generated revenue of
$64.2 million from the sale and lease of our products and related services.
 
Our solutions enable healthcare facilities to acquire, manage, dispense and
deliver pharmaceuticals and medical supplies more effectively and efficiently.
Our pharmacy and supply systems facilitate the distribution of pharmaceuticals
and medical supplies at the point of care. These systems interface with
healthcare facilities' existing information systems to accurately capture and
display critical patient data. Our Internet-based procurement application
automates and integrates healthcare facilities' requisition and approval
processes. Furthermore, our Internet-enabled decision support product allows
healthcare facilities to monitor trends in drug utilization and diversion,
improve regulatory compliance and reduce costs by monitoring usage patterns and
optimizing product management. When used in combination, our products and
services offer a comprehensive clinical infrastructure and workflow automation
solution for healthcare facilities.
 
OUR MARKET
 
The delivery of healthcare in the United States is dependent upon predominantly
manual and paper-based methods, resulting in a highly fragmented, complex and
inefficient system. A primary cause of this inefficiency is the relatively small
investment made by healthcare facilities in information technology in the last
two decades. Many existing healthcare information systems are unable to support
the modernization of healthcare delivery processes and address patient safety
initiatives. These factors have contributed to medical errors and unnecessary
process costs across the sector.
 
The Institute of Medicine highlighted the prevalence of medical errors in a
November 1999 report based on the results of more than 30 independent studies.
The report indicated that medical errors are among the top ten causes of death
in the United States, and that medication errors specifically were responsible
for more than an estimated 7,000 deaths in 1993. In March 2001, the Institute of
Medicine issued a follow-up report that recommended increased investment in
information technology as a means of reducing medical errors and improving the
overall quality of patient care.
 
Economic pressures have also dramatically impacted patient care by reducing the
flow of funds to healthcare providers and facilities. For example, the passage
of the Balanced Budget Act of 1997 proposed a reduction of payments to
healthcare providers by more than $250 billion over a five-year period.
Continuing consolidation in the healthcare industry and shortages in the U.S.
labor market for healthcare professionals have also significantly impacted
patient care and contributed to the pressures faced by healthcare providers and
facilities.
 
                                       1

<PAGE>
OUR SOLUTIONS
 
Our clinical infrastructure and workflow automation solutions are designed to:
 
    - reduce medication errors;
 
    - reduce costs;
 
    - improve operating efficiency;
 
    - leverage investments in existing information systems;
 
    - simplify the process of ordering pharmaceuticals and medical supplies; and
 
    - monitor utilization trends.
 
OUR STRATEGY
 
Our goal is to become the leading provider of clinical infrastructure and
workflow automation solutions for the healthcare industry by focusing on the
following strategies:
 
    - continue to leverage and extend our solutions to address patient safety
      and cost-containment pressures facing healthcare facilities;
 
    - continue to collaborate with leading healthcare providers in the
      definition, development and deployment of our products and services;
 
    - further penetrate our installed customer base, which to date has purchased
      only a subset of our available products and services;
 
    - develop solutions that enhance our customers' existing systems in order to
      preserve, leverage and upgrade their existing information systems; and
 
    - develop strategic relationships with other healthcare and non-healthcare
      partners to enhance our product offerings, broaden our automation
      solutions and increase our sales opportunities.
 
OFFICE LOCATION AND CORPORATE INFORMATION
 
Our principal executive offices are located at 1101 East Meadow Drive, Palo
Alto, California 94303, and our telephone number is (650) 251-6100. Our Web site
is located at www.omnicell.com. The information on our Web site is neither
incorporated by reference into, nor a part of, this prospectus.
 
We were incorporated in California in September 1992 under the name OmniCell
Technologies, Inc. In September 1999, we changed our name to Omnicell.com. We
intend to reincorporate in Delaware and change our name to Omnicell, Inc. prior
to the completion of the offering. Our logo, Omnicell-Registered Trademark-,
OmniCenter-Registered Trademark-, OmniRx-Registered Trademark-, See & Touch-TM-
and Sure-Med-Registered Trademark- are trademarks of Omnicell, Inc. This
prospectus also includes trademarks of other companies.
 
                                       2

<PAGE>
THE OFFERING
 

<TABLE>
<S>                                            <C>
Common stock offered.........................  shares
 
Common stock outstanding after the
  offering...................................  shares
 
Offering price...............................  $    per share
 
Use of proceeds..............................  To expand sales, marketing, research and
                                               development and customer support activities;
                                               to repay debt owed to Baxter Healthcare; to
                                               redeem preferred stock held by Sun
                                               Healthcare; and for working capital and other
                                               general corporate purposes, including
                                               potential acquisitions.
 
Proposed Nasdaq National Market symbol.......  OMCL
</TABLE>

 
The number of shares of common stock to be outstanding after the offering is
based on 14,861,351 shares outstanding as of February 28, 2001 and excludes:
 
    - 3,678,336 shares of our common stock issuable upon exercise of outstanding
      options;
 
    - 102,183 shares of our common stock issuable upon exercise of outstanding
      warrants;
 
    - 1,067,776 shares of common stock reserved for issuance under our stock
      option plan;
 
    - 174,488 shares of common stock reserved for issuance under our employee
      stock purchase plans; and
 
    - 540,600 shares of our Series J Preferred Stock that will be redeemed in
      connection with the completion of this offering.
 
Except as otherwise noted, all information in this prospectus:
 
    - assumes no exercise of the underwriters' over-allotment option;
 
    - reflects our reincorporation into Delaware;
 
    - reflects the completion of a 1-for-1.6 reverse stock split that will occur
      prior to the closing of this offering; and
 
    - reflects the conversion or redemption of all outstanding redeemable
      convertible preferred stock and the conversion of all outstanding
      convertible preferred stock and a convertible note into shares of common
      stock upon completion of this offering.
 
                                       3

<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(in thousands, except per share and other data)
 
You should read the following summary consolidated financial data together with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and related notes included
in this prospectus.
 
The pro forma net loss per share data and the pro forma as adjusted balance
sheet data give effect to (i) the redemption of 540,600 shares of our redeemable
convertible preferred stock and (ii) the conversion of 180,200 shares of our
redeemable convertible preferred stock, all of our convertible preferred stock
and a convertible note into shares of our common stock, which we expect to occur
upon the completion of this offering. The pro forma as adjusted balance sheet
data also give effect to the sale of          shares of common stock by us at an
assumed initial public offering price of $
per share and the application of the net proceeds from this offering as
discussed in "Use of Proceeds."
 

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                     ----------------------------------------------------
                                                       1996       1997       1998     1999(1)    2000(2)
                                                     --------   --------   --------   --------   --------
<S>                                                  <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues...........................................  $ 21,554   $ 36,073   $48,212    $ 53,381   $ 64,210
Cost of revenues(3)................................    10,643     16,572    18,144      33,880     26,002
                                                     --------   --------   -------    --------   --------
Gross profit.......................................    10,911     19,501    30,068      19,501     38,208
Loss from operations(4)............................   (11,154)   (10,941)     (211)    (25,826)   (21,296)
Net income (loss)..................................  $(10,460)  $(10,189)  $   643    $(27,742)  $(22,552)
                                                     ========   ========   =======    ========   ========
Net income (loss) applicable to common
  stockholders.....................................  $(10,471)  $(10,211)  $   621    $(27,742)  $(22,552)
                                                     ========   ========   =======    ========   ========
Net income (loss) per common share:
  Basic............................................  $ (10.39)  $  (8.93)  $  0.48    $ (18.86)  $ (13.23)
                                                     ========   ========   =======    ========   ========
  Diluted..........................................  $ (10.39)  $  (8.93)  $  0.06    $ (18.86)  $ (13.23)
                                                     ========   ========   =======    ========   ========
  Pro forma basic and diluted (unaudited)..........                                              $  (1.57)
                                                                                                 ========
 
Weighted average common shares outstanding:
  Basic............................................     1,008      1,144     1,302       1,471      1,704
  Diluted..........................................     1,008      1,144    11,013       1,471      1,704
  Pro forma basic and diluted (unaudited)..........                                                14,403
 
OTHER DATA(5):
Cumulative number of sites of installed pharmacy
  and supply systems...............................       119        176       258         910      1,096
Cumulative number of installed pharmacy and supply
  systems..........................................     2,227      3,928     5,875      14,242     17,772
</TABLE>

 

<TABLE>
<CAPTION>
                                                               DECEMBER 31, 2000(2)
                                                              -----------------------
                                                                           PRO FORMA
                                                               ACTUAL     AS ADJUSTED
                                                              ---------   -----------
<S>                                                           <C>         <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments...........  $ 11,967     $
Total assets................................................    43,905
Deferred gross profit(6)....................................    29,898
Long-term obligations, net of current portion...............     9,218
Redeemable convertible preferred stock......................    10,113
Total stockholders' equity (net capital deficiency).........  $(29,075)    $
</TABLE>

 
------------------------------
 
(1)  The amounts shown for the year ended December 31, 1999 include the results
     of the Sure-Med acquisition from January 29, 1999 to the end of 1999.
 
                                       4

<PAGE>
(2)  The amounts shown for the year ended December 31, 2000 include special
     charges in the third quarter of 2000 related to: restructuring
    activities--$2.0 million writedown of Commerce One MarketSite software
    license, $0.6 million in employee severance expenses and $0.3 million
    writedown of capitalized software development costs; recognition of
    $1.1 million expense associated with previously deferred offering expenses;
    and $0.2 million writedown of identified intangible assets remaining from
    the Sure-Med acquisition.
 
(3)  Cost of revenues for the year ended December 31, 1999 includes: special
     charges related to the writedown of Sure-Med inventory--$9.7 million;
    purchase accounting adjustment due to the sale of Sure-Med inventories that
    had been written-up to fair value--$1.1 million; and costs incurred to
    complete Sure-Med installation obligations--$0.8 million.
 
(4)  Loss from operations for the year ended December 31, 1999 includes:
     integration expenses associated with the Sure-Med
    acquisition--$0.8 million; and write-off of an equity
    investment--$0.6 million.
 
(5)  Figures do not include systems installed at Sun Healthcare sites.
 
(6)  Deferred gross profit represents gross profit on sales of pharmacy and
     supply systems, excluding installation cost, that have been shipped to,
    accepted and, in most instances, paid for by our customer but not yet
    installed at the customer site. The revenues and cost of revenues for such
    items will be recorded upon completion of installation.
 
                                       5

<PAGE>

                                  RISK FACTORS
 
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. YOU SHOULD ALSO CONSIDER THE OTHER INFORMATION IN THIS
PROSPECTUS. IN ADDITION, THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING US BECAUSE WE ARE ALSO SUBJECT TO ADDITIONAL RISKS AND
UNCERTAINTIES NOT PRESENTLY KNOWN TO US. IF ANY OF THESE RISKS ACTUALLY OCCURS,
OUR BUSINESS, FINANCIAL CONDITION, OPERATING RESULTS OR CASH FLOWS COULD BE
SERIOUSLY HARMED. THIS COULD CAUSE THE TRADING PRICE OF OUR COMMON STOCK TO
DECLINE, AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.
 
RISKS RELATED TO OUR BUSINESS
 
ANY REDUCTION IN THE GROWTH AND ACCEPTANCE OF OUR PRODUCTS AND SERVICES WOULD
HARM OUR BUSINESS.
 
Our pharmacy and supply systems represent a relatively new approach to managing
the distribution of pharmaceuticals and supplies at healthcare facilities. Many
healthcare facilities still use traditional approaches that do not include
automated methods of pharmacy and supply management. As a result, we must
continuously educate existing and prospective customers about the advantages of
our products. Our pharmacy and supply systems typically represent a sizeable
initial capital expenditure for healthcare organizations. Changes in the budgets
of these organizations and the timing of spending under these budgets can have a
significant effect on the demand for our pharmacy and supply systems and related
services. In addition, these budgets are often characterized by limited
resources and conflicting spending priorities among different departments. Any
decrease in expenditures by these healthcare facilities could harm our business.
We cannot assure you that we will continue to be successful in marketing our
pharmacy and supply systems or that the level of market acceptance of such
systems will be sufficient to generate operating income.
 
THE HEALTHCARE INDUSTRY FACES FINANCIAL CONSTRAINTS AND CONSOLIDATION THAT COULD
ADVERSELY AFFECT THE DEMAND FOR OUR PRODUCTS AND SERVICES.
 
The healthcare industry has faced, and will likely continue to face, significant
financial constraints. For example, the shift to managed care in the 1990s put
pressure on healthcare organizations to reduce costs, and the Balanced Budget
Act of 1997 significantly reduced Medicare reimbursement to healthcare
organizations. Our automation solutions often involve a significant financial
commitment by our customers, and, as a result, our ability to grow our business
is largely dependent on our customers' information technology budgets. To the
extent healthcare information technology spending declines or increases more
slowly than we anticipate, demand for our products and services would be
adversely affected.
 
Many healthcare providers have consolidated to create larger healthcare delivery
organizations with greater market power. If this consolidation continues, it
could erode our customer base and could reduce the size of our target market. In
addition, the resulting organizations could have greater bargaining power, which
may lead to price erosion.
 
Sun Healthcare Group, Inc., a customer that has accounted for a significant
percentage of our sales over the past five years, filed for Chapter 11
bankruptcy protection in 1999. Revenues from Sun Healthcare were significantly
reduced in 2000, and we do not expect any purchases of our products and services
by Sun Healthcare in 2001 or future years.
 
THE CLINICAL INFRASTRUCTURE AND WORKFLOW AUTOMATION MARKET IS HIGHLY COMPETITIVE
AND WE MAY BE UNABLE TO COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND
ESTABLISHED COMPANIES WITH GREATER RESOURCES.
 
The clinical infrastructure and workflow automation market is intensely
competitive and is characterized by evolving technologies and industry
standards, frequent new product introductions and dynamic customer requirements.
We expect continued and increased competition from current and
 
                                       6

<PAGE>
future competitors, many of whom have significantly greater financial,
technical, marketing and other resources than we do. Our current direct
competitors in the clinical infrastructure and workflow automation market
include Pyxis Corporation (a division of Cardinal Health) and Automated
Healthcare (a division of McKessonHBOC).
 
The competitive challenges we face in the clinical infrastructure and workflow
automation market include, but are not limited to:
 
    - Our competitors may develop, license or incorporate new or emerging
      technologies or devote greater resources to the development, promotion and
      sale of their products and services.
 
    - Certain competitors have greater name recognition and a more extensive
      installed base of pharmacy and supply systems or other products and
      services, and such advantages could be used to increase their market
      share.
 
    - Other established or emerging companies may enter the clinical
      infrastructure and workflow automation market.
 
    - Current and potential competitors may make strategic acquisitions or
      establish cooperative relationships among themselves or with third
      parties, including larger, more established healthcare supply companies,
      thereby increasing their ability to develop and offer products and
      services to address the needs of our prospective customers.
 
    - Our competitors may secure products and services from suppliers on more
      favorable terms or secure exclusive arrangements with suppliers or buyers
      that may impede the sales of our products and services.
 
Competitive pressures could result in price reductions of our products and
services, fewer customer orders and reduced gross margins, any of which could
harm our business.
 
WE HAVE A HISTORY OF OPERATING LOSSES AND WE CANNOT ASSURE YOU THAT WE WILL
ACHIEVE PROFITABILITY.
 
For 1996 and 1997, we incurred net losses of approximately $10.5 million and
$10.2 million, respectively. We had net income of approximately $0.6 million in
1998 and had net losses of $27.7 million and $22.6 million in 1999 and 2000,
respectively. As of December 31, 2000, we had an accumulated deficit of
approximately $96.0 million. There can be no assurance we will achieve
profitability in the future. Even if we achieve profitability, we may not be
able to sustain or increase profitability on a quarterly or annual basis.
 
IF WE FAIL TO MANAGE OUR GROWING AND CHANGING OPERATIONS, OUR BUSINESS COULD BE
HARMED.
 
During 2000, we experienced a period of significant fluctuation in our number of
employees and expansion of the scope of our operating and financial systems.
This has resulted in new and increased responsibilities for management
personnel. To accommodate our changing operations, compete effectively and
manage potential future growth, we must continue to implement and improve our
information systems, procedures and controls, and we must hire competent and
qualified personnel. In addition, we must train, motivate and manage our
workforce to meet the increasing challenge of expanding our automation solutions
business. These demands will require the addition of new management personnel
and the training of existing management personnel, including information
systems, sales, technical, service support and financial reporting personnel. We
cannot assure you that our personnel, systems, procedures and controls will be
adequate to support our future operations.
 
                                       7

<PAGE>
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND MAY CAUSE OUR
STOCK PRICE TO DECLINE.
 
Our quarterly operating results have varied significantly in the past and may
vary significantly in the future depending on many factors that may include, but
are not limited to, the following:
 
    - the size and timing of orders for our pharmacy and supply systems, and
      their installation and integration;
 
    - the overall demand for healthcare clinical infrastructure and workflow
      automation solutions;
 
    - changes in pricing policies by us or our competitors;
 
    - the number, timing and significance of product enhancements and new
      product announcements by us or our competitors;
 
    - the relative proportions of revenues we derive from products and services;
 
    - our customers' budget cycles;
 
    - changes in our operating expenses;
 
    - the performance of our products;
 
    - changes in our business strategy; and
 
    - economic and political conditions, including fluctuations in interest
      rates and tax increases.
 
Due to the foregoing factors, our quarterly revenues and operating results are
difficult to forecast. Revenues are also difficult to forecast because the
clinical infrastructure and workflow automation market is rapidly evolving.
 
The purchase of our pharmacy and supply systems is often part of a customer's
larger initiative to re-engineer their pharmacy, distribution and materials
management systems. As a result, the purchase of our pharmacy and supply systems
generally involves a significant commitment of management attention and
resources by prospective customers and often requires the input and approval of
many decision makers, including pharmacy directors, materials managers, nurse
managers, financial managers, information systems managers, administrators and
boards of directors. For these and other reasons, the sales cycle associated
with the sale or lease of our pharmacy and supply systems is often lengthy and
subject to a number of delays over which we have little or no control. We cannot
assure you that we will not experience delays in the future. A delay in, or loss
of, sales of our pharmacy and supply systems could cause our operating results
to vary significantly from quarter to quarter and could harm our business.
Accordingly, we believe that period-to-period comparisons of our operating
results are not necessarily indicative of our future performance. Although we
recently experienced revenue growth, this growth should not be considered
indicative of future revenue growth, if any, or of future operating results.
 
OUR BUSINESS COULD BE HARMED IF WE ARE UNABLE TO RECRUIT AND RETAIN PERSONNEL.
 
Our success is highly dependent upon the continuing contributions of our key
management, sales, technical and engineering staff. We believe that our future
success will depend upon our ability to attract, train and retain highly skilled
and motivated personnel. In particular, we will need to hire a number of
information technology, research and development, programming and engineering
personnel to assist in the continued development of our business. As our
products are installed in increasingly complex environments, greater technical
expertise will be required. As our installed base of customers increases, we
will also face additional demands on our customer service and support personnel,
requiring additional resources to meet these demands. We may experience
difficulty in recruiting qualified personnel. Competition for qualified
technical, engineering, managerial, sales, marketing, financial reporting and
other personnel is intense and we cannot assure you that we will be successful
 
                                       8

<PAGE>
in attracting and retaining qualified personnel. Competitors have in the past
attempted, and may in the future attempt, to recruit our employees. Failure to
attract and retain key personnel could harm our business, results of operations
and financial condition.
 
IF WE ARE UNABLE TO MAINTAIN OUR RELATIONSHIPS WITH GROUP PURCHASING
ORGANIZATIONS OR OTHER SIMILAR ORGANIZATIONS, WE MAY HAVE DIFFICULTY SELLING OUR
PRODUCTS AND SERVICES.
 
We have agreements with various group purchasing organizations, such as Premier,
Inc., Novation, LLC and Consorta Catholic Resources Partners, that enable us to
more readily sell our products and services to customers represented by these
organizations. Our relationships with these organizations are terminable at the
convenience of either party. The loss of our relationship with Premier, for
example, could impact the breadth of our customer base and could impair our
ability to increase our revenues. We cannot guarantee that these organizations
will renew our contracts on similar terms, if at all, and we cannot guarantee
that they will not terminate our contracts before they expire.
 
WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS FOR OUR PHARMACY AND SUPPLY SYSTEMS
AND OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO OBTAIN AN ADEQUATE SUPPLY OF
COMPONENTS AND EQUIPMENT ON A TIMELY BASIS.
 
Our production strategy for our pharmacy and supply systems is to work closely
with several key sub-assembly manufacturers and utilize lower cost manufacturers
whenever possible. Although many of the components of our systems are
standardized and available from multiple sources, certain components or
subsystems are fabricated according to our specifications. At any given point in
time, we may only use a single source of supply for certain components. Our
failure to obtain alternative vendors, if required, for any of the numerous
components used to manufacture our products would limit our ability to
manufacture our products and could harm our business. In addition, any failure
of a maintenance contractor to perform adequately could harm our business.
 
WE DEPEND ON SERVICES FROM THIRD PARTIES TO SUPPORT OUR PRODUCTS, AND IF WE ARE
UNABLE TO CONTINUE THESE RELATIONSHIPS AND MAINTAIN THEIR SERVICES, OUR BUSINESS
COULD SUFFER.
 
Our ability to develop, manufacture and support our existing products and any
future products depends upon our ability to enter into and maintain contractual
arrangements with others. We currently depend upon services from a number of
third-party vendors, including Dade Behring Inc., Gold Standard Multimedia and
U.S. Pharmacopeia to support our products. We cannot be sure that we will be
able to maintain our existing or future service arrangements, or that we will be
able to enter into future arrangements with third parties on terms acceptable to
us, or at all. If we fail to maintain our existing service arrangements or to
establish new arrangements when and as necessary, our business may be harmed.
 
IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE OUR AUTOMATION SOLUTIONS WITH THE
EXISTING INFORMATION SYSTEMS OF OUR CUSTOMERS, THEY MAY CHOOSE NOT TO USE OUR
PRODUCTS AND SERVICES.
 
For healthcare facilities to fully benefit from our automation solutions, our
systems must integrate with their existing information systems. This may require
substantial cooperation, investment and coordination on the part of our
customers. There is little uniformity in the systems currently used by our
customers, which complicates the integration process. If these systems are not
successfully integrated, our customers could choose not to use or to reduce
their use of our automation solutions, which would harm our business.
 
                                       9

<PAGE>
ANY DETERIORATION IN OUR RELATIONSHIP WITH COMMERCE ONE WOULD ADVERSELY AFFECT
OUR INTERNET-BASED PROCUREMENT CAPABILITIES.
 
We have entered into an agreement with Commerce One, Inc., a provider of
business-to-business technology solutions that link buyers and suppliers of
goods and services to trading communities over the Internet. Our agreement with
Commerce One enables us to implement a customized version of Commerce One's
BuySite software at customer sites. We cannot be sure that Commerce One will not
license its BuySite technology to our competitors. We cannot guarantee that
Commerce One will be able to develop and introduce enhancements to its products
that keep pace with emerging technological developments and emerging industry
standards. Moreover, we cannot guarantee that the Commerce One network will not
experience performance problems or delays. The failure by Commerce One in any of
these areas could harm our Internet-based procurement capabilities.
 
OUR FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD ADVERSELY AFFECT
OUR ABILITY TO COMPETE.
 
We believe that our success will depend in part on our ability to obtain patent
protection for products and processes and our ability to preserve our
trademarks, copyrights and trade secrets. We have pursued patent protection in
the United States and foreign jurisdictions for technology that we believe to be
proprietary and for technology that offers us a potential competitive advantage
for our products, and we intend to continue to pursue such protection in the
future. We currently own ten U.S. patents. In addition, we currently have one
U.S. patent allowed and awaiting issue and five U.S. patents in application. The
issued patents relate to various features of our pharmacy and supply systems.
There are other issued patents and applications in process in Australia, Japan,
Hong Kong, Canada and European countries related to issued and pending
applications in the United States. There can be no assurance that we will file
any patent applications in the future, that any of our patent applications will
result in issued patents or that, if issued, such patents will provide
significant protection for our technology and processes. Furthermore, there can
be no assurance that others will not develop technologies that are similar or
superior to our technology or that others will not design around the patents we
own. All of our operating system software is copyrighted and subject to the
protection of applicable copyright laws. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy aspects of our
products or obtain and use information that we regard as proprietary.
 
INTELLECTUAL PROPERTY OR PRODUCT LIABILITY CLAIMS AGAINST US COULD CAUSE OUR
BUSINESS TO SUFFER.
 
We do not believe that any of our products infringe upon the proprietary rights
of third parties. We cannot assure you, however, that third parties will not
claim that we have infringed upon their intellectual property rights with
respect to current or future products. We expect that developers of pharmacy and
supply systems will be increasingly subject to infringement claims as the number
of products and competitors in our industry grows and the functionality of
products in different industry segments overlaps. We do not possess special
insurance that covers intellectual property infringement claims; however, such
claims may be covered under our traditional insurance policies. These policies
contain terms, conditions and exclusions that make recovery for intellectual
infringement claims difficult to guarantee. Any infringement claims, with or
without merit, could be time-consuming to defend, result in costly litigation,
divert management's attention and resources, cause product shipment delays or
require us to enter into royalty or licensing agreements. These royalty or
licensing agreements, if required, may not be available on terms acceptable to
us, or at all, which could harm our business.
 
We provide products that build clinical infrastructure and automate workflow.
Despite the presence of healthcare professionals as intermediaries between our
products and patients, if our products fail to provide accurate and timely
information or operate as designed, customers, patients or their family members
could assert claims against us for product liability. Also, in the event that
any of our products is defective, we may be required to recall or redesign such
products. Litigation with respect to liability
 
                                       10

<PAGE>
claims, regardless of its outcome, could result in substantial cost to us,
divert management's attention from operations and decrease market acceptance of
our products. Although we have not experienced any product liability claims to
date, the sale and support of our products entail the risk of product liability
claims. We possess a variety of insurance policies that include coverage for
general commercial liability and technology errors and omissions liability.
However, these policies may not be adequate against product liability claims. A
successful claim brought against us, or any claim or product recall that results
in negative publicity about us, could harm our business.
 
CHANGING CUSTOMER REQUIREMENTS COULD DECREASE THE DEMAND FOR OUR PRODUCTS AND
SERVICES, WHICH COULD HARM OUR BUSINESS.
 
The clinical infrastructure and workflow automation market is intensely
competitive and is characterized by evolving technologies and industry
standards, frequent new product introductions and dynamic customer requirements
that may render existing products obsolete or less competitive. As a result, our
position in the clinical infrastructure and workflow automation market could
erode rapidly due to unforeseen changes in the features and functions of
competing products, as well as the pricing models for such products. Our future
success will depend in part upon our ability to enhance our existing products
and services and to develop and introduce new products and services to meet
changing customer requirements. The process of developing products and services
such as those we offer is extremely complex and is expected to become
increasingly complex and expensive in the future as new technologies are
introduced. If we are unable to enhance our existing products or develop new
products to meet changing customer requirements, demand for our products could
suffer.
 
WE MAY BE REQUIRED TO SEEK ADDITIONAL FINANCING TO MEET OUR FUTURE CAPITAL
NEEDS, WHICH WE MAY NOT BE ABLE TO SECURE ON FAVORABLE TERMS, OR AT ALL.
 
We plan to continue to expend substantial funds for research and development
activities, product development, integration efforts and expansion of sales and
marketing activities. We may be required to expend greater than anticipated
funds if unforeseen difficulties arise in the course of completing the
development and marketing of our products or services or in other aspects of our
business. Our future liquidity and capital requirements will depend upon
numerous factors, including:
 
    - the development of new products and services on a timely basis;
 
    - the receipt of and timing of orders for our pharmacy and supply systems;
      and
 
    - the cost of developing increased manufacturing and sales capacity.
 
As a result of the foregoing factors, it is possible that we will be required to
raise additional funds through public or private financings, collaborative
relationships or other arrangements. We cannot assure you that this additional
funding, if needed, will be available on terms attractive to us, if at all.
Furthermore, any additional equity financing may be dilutive to stockholders,
and debt financing, if available, may involve restrictive covenants that could
affect our ability to pay dividends or raise additional capital. Our failure to
raise capital when needed could harm our business.
 
GOVERNMENT REGULATION OF THE HEALTHCARE INDUSTRY COULD HARM OUR BUSINESS.
 
While the manufacture and sale of our current products are not regulated by the
United States Food and Drug Administration (FDA), we cannot assure you that
these products, or our future products, if any, will not be regulated in the
future. A requirement for FDA approval could have a material adverse effect on
our business. Pharmacies are regulated by individual state boards of pharmacy
that issue rules for pharmacy licensure in their respective jurisdictions. State
boards of pharmacy do not license or approve our pharmacy and supply systems;
however, pharmacies using our equipment are subject to state board approval. The
failure of such pharmacies to meet differing requirements from a significant
 
                                       11

<PAGE>
number of state boards of pharmacy could harm our business, results of
operations and financial condition. Similarly, hospitals must be accredited by
the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) in
order to be eligible for Medicaid and Medicare funds. JCAHO does not approve or
accredit pharmacy and supply systems; however, disapproval of our customers'
pharmacy and supply management methods and their failure to meet JCAHO
requirements could harm our business.
 
While we have implemented a Privacy and Use of Information Policy and strictly
adhere to established privacy principles, use of customer information guidelines
and federal and state statutes and regulations regarding privacy and
confidentiality, we cannot assure you that we will be in compliance with the
Health Insurance Portability and Accountability Act of 1996 (HIPAA). This
legislation requires the Secretary of Health and Human Services (HHS), to adopt
national standards for some types of electronic health information transactions
and the data elements used in those transactions, adopt standards to ensure the
integrity and confidentiality of health information and establish a schedule for
implementing national health data privacy legislation or regulations. In
December 2000, HHS published its final health data privacy regulations, which
will take effect in December 2002. These regulations restrict the use and
disclosure of personally identifiable health information without the prior
informed consent of the patient. HHS has not yet issued final rules on most of
the other topics under HIPAA and has yet to issue proposed rules on some topics.
The final rules, if and when issued, may differ from the proposed rules. We
cannot predict the potential impact of rules that have not yet been proposed or
any other rules that might be finally adopted instead of the proposed rules. In
addition, other federal and/or state privacy legislation may be enacted at any
time. These laws or regulations, if adopted, could restrict the ability of our
customers to obtain, use or disseminate patient information. This could
adversely affect demand for our products or force us to redesign our products in
order to meet the requirements of any new regulations.
 
OUR FACILITIES ARE LOCATED NEAR KNOWN EARTHQUAKE FAULT ZONES, AND THE OCCURRENCE
OF AN EARTHQUAKE OR OTHER NATURAL DISASTER COULD CAUSE DAMAGE TO OUR FACILITIES
AND EQUIPMENT, WHICH COULD REQUIRE US TO CEASE OR CURTAIL OPERATIONS.
 
Our facilities are located near known earthquake fault zones and are vulnerable
to significant damage from earthquakes. We are also vulnerable to damage from
other types of disasters, including tornadoes, fires, floods, power loss,
communications failures and similar events. If any disaster were to occur, our
ability to operate our business at our facilities would be seriously, or
potentially completely, impaired or destroyed. The insurance we maintain may not
be adequate to cover our losses resulting from disasters or other business
interruptions.
 
RISKS RELATED TO THIS OFFERING
 
OUR STOCK PRICE MAY BE EXTREMELY VOLATILE AND YOU MAY NOT BE ABLE TO RESELL YOUR
SHARES AT OR ABOVE THE INITIAL PUBLIC OFFERING PRICE.
 
Prior to the offering, there has been no public market for our common stock. We
do not know the extent to which investor interest will lead to the development
of an active public market. The initial public offering price will be determined
by negotiations between the representatives of the underwriters and us and may
not be indicative of the market price for our common stock after the offering.
With the current uncertainty about healthcare reimbursement and coverage in the
United States, there has been significant volatility in the market price and
trading volume of securities of healthcare related companies unrelated to the
performance of these companies. These broad market fluctuations may negatively
affect the market price of our common stock. As a consequence, you may not be
able to sell the common stock you purchase at or above the initial public
offering price.
 
                                       12

<PAGE>
In the past, securities class action litigation has often been brought against
companies following periods of volatility in the market price of their
securities. If brought against us, regardless of the outcome, litigation could
result in substantial costs and a diversion of our management's attention and
resources and could harm our business.
 
IF WE FAIL TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE
MARKET PRICE OF OUR COMMON STOCK MAY DECREASE SIGNIFICANTLY.
 
We may fail to meet the revenue and profitability expectations of public market
analysts and investors. If this occurs, the price of our common stock will
likely fall.
 
AFTER THIS OFFERING, OUR OFFICERS AND DIRECTORS WILL OWN A LARGE PERCENTAGE OF
OUR COMMON STOCK AND WILL BE ABLE TO CONTROL THE OUTCOME OF MATTERS REQUIRING
STOCKHOLDER APPROVAL.
 
Upon the completion of this offering, executive officers, directors and current
holders of five percent (5%) or more of our outstanding common stock will, in
the aggregate, beneficially own approximately    % of our outstanding common
stock. As a result, these stockholders will be able to effectively control all
matters requiring approval of our stockholders, including the election of
directors and approval of significant corporate transactions. This concentration
of ownership may also delay, deter or prevent a change in control and may make
some transactions more difficult or impossible to complete without the support
of these stockholders, even if the transaction is favorable to our stockholders.
In addition, because of their ownership of our common stock, these stockholders
will be in a position to significantly affect our corporate actions in a manner
that could conflict with the interests of our public stockholders.
 
SUBSTANTIAL SALES OF COMMON STOCK BY OUR EXISTING STOCKHOLDERS COULD CAUSE OUR
STOCK PRICE TO FALL.
 
The market price of our common stock could decline if our existing stockholders
sell substantial amounts of our common stock in the public market after this
offering. These sales also might make it more difficult for us to sell equity
securities in the future at a time and at a price that we deem appropriate. Upon
completion of this offering, assuming the number of outstanding shares as of
February 28, 2001, we will have          shares of common stock outstanding,
        shares if the underwriters exercise their over-allotment option in full.
Of these shares,         shares, plus an additional         shares if the
underwriters exercise their over-allotment option in full, will be freely
tradeable without restriction or further registration under the Securities Act
of 1933, as amended. Of the remaining shares, a total of approximately
        shares held by our directors, executive officers and our existing
stockholders are subject to lock-up agreements providing that these stockholders
will not sell or otherwise dispose of any of their shares for a period of 180
days following the date of the final prospectus for this offering without the
prior written consent of U.S. Bancorp Piper Jaffray Inc. U.S. Bancorp Piper
Jaffray can release these lock-up agreements at any time. In addition, options
to purchase 3,678,336 shares of our common stock are outstanding as of
February 28, 2001, under our 1992 Equity Incentive Plan, our 1995 Management
Stock Option Plan and our 1999 Equity Incentive Plan. Following this offering,
we expect to register the shares underlying these options. Subject to the
exercise of these options, shares included in such registration will be
available for sale in the open market immediately after the 180-day lock-up
period expires. See "Shares Eligible For Future Sale" for a more detailed
discussion.
 
After this offering, the holders of approximately 11,714,782 shares of common
stock will be entitled to rights with respect to registration of such shares
under the Securities Act. If such holders, by exercising their registration
rights, cause a large number of securities to be registered and sold in the
public market, these sales could have an adverse effect on the market price for
our common stock. If we were to initiate a registration and include shares held
by these holders pursuant to the exercise of their registration rights, these
sales may impair our ability to raise capital.
 
                                       13

<PAGE>
OUR CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN PROVISIONS THAT COULD DELAY
OR PREVENT A CHANGE IN CONTROL THAT MAY BE FAVORABLE TO OUR STOCKHOLDERS.
 
Upon the completion of this offering, we will be subject to the Delaware
anti-takeover laws regulating corporate takeovers. These laws prevent Delaware
corporations from engaging in a merger or sale of more than 10% of their assets
with any stockholder who owns 15% or more of the corporation's outstanding
voting stock, including all affiliates and associates of any stockholder, for
three years following the date that such stockholder acquired 15% or more of the
corporation's voting stock unless:
 
    - prior to such date, the board of directors of the corporation approved
      either the business combination or the transaction that resulted in the
      stockholder becoming an interested stockholder;
 
    - upon consummation of the transaction that resulted in the stockholder's
      becoming an interested stockholder, the interested stockholder owned at
      least 85% of the voting stock of the corporation outstanding at the time
      the transaction commenced, excluding those shares owned by persons who are
      directors and also officers, and employee stock plans in which employee
      participants do not have the right to determine confidentially whether
      shares held subject to the plan will be tendered in a tender or exchange
      offer; or
 
    - on or subsequent to such date, the business combination is approved by the
      board of directors and authorized at an annual or special meeting of
      stockholders, and not by written consent, by the affirmative vote of at
      least two-thirds of the outstanding voting stock that is not owned by the
      interested stockholder.
 
As such, these laws could prohibit or delay mergers or a change of control of us
and may discourage attempts by other companies to acquire us.
 
In addition, our Certificate of Incorporation and Bylaws include a number of
provisions that may deter or impede hostile takeovers or changes of control or
management. These provisions include:
 
    - a Board of Directors classified into three classes of directors with
      staggered three-year terms;
 
    - the authority of the Board of Directors to issue up to 5,000,000 shares of
      preferred stock and to determine the price, rights, preferences and
      privileges of these shares, without stockholder approval; and
 
    - all stockholder actions must be effected at a duly called meeting of
      stockholders and not by written consent.
 
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF YOUR SHARES.
 
The initial public offering price is substantially higher than the pro forma net
tangible book value of each outstanding share of our common stock. As a result,
investors participating in this offering will suffer immediate and substantial
dilution. The dilution will be $     per share in the pro forma net tangible
book value of the common stock from the assumed initial public offering price of
$     (or $     per share if the underwriters' option to purchase additional
shares is exercised in full). This dilution is described in greater detail under
"Dilution" in this prospectus. If outstanding options or warrants to purchase
shares of common stock are exercised, there will be further dilution.
 
                                       14

<PAGE>
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus contains forward-looking statements. These statements relate to
future events or our future financial performance. We have attempted to identify
forward-looking statements by terminology including, "anticipates," "believes,"
"can," "continue," "could," "estimates," "expects," "intends," "may," "plans,"
"potential," "predicts," "should" or "will" or the negative of these terms or
other comparable terminology. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including the risks
outlined under "Risk Factors," that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
 
Although we believe that our expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are not under any duty to update any
of the forward-looking statements after the date of this prospectus to conform
these statements to actual results, unless required by law.
 

                                USE OF PROCEEDS
 
We estimate that our net proceeds from the sale of the          shares of common
stock we are offering, assuming an initial public offering price of $     per
share, will be approximately $         , or $         if the underwriters'
over-allotment option is exercised in full, after deducting the estimated
underwriting discounts and commissions and estimated offering expenses payable
by us.
 
We will use a significant portion of the net proceeds for the expansion of
sales, marketing, research and development and customer support activities. We
also intend to use approximately $7.9 million of the net proceeds to repay the
outstanding principal and interest related to the note held by Baxter Healthcare
incurred in connection with our acquisition of the Sure-Med product line in
January 1999. The Baxter Healthcare note accrues interest at a rate of 8.0%. In
addition, the principal under the note is repayable in eight equal quarterly
installments beginning in March 2002. We also intend to use approximately
$7.6 million of the net proceeds to redeem 540,600 shares of redeemable
convertible preferred stock held by Sun Healthcare. In addition, in the event
that the price per share to the public (prior to deducting the underwriter
commissions and offering expenses) is less than $11.78, we intend to use an
additional $2.5 million of the net proceeds to redeem the remaining 180,200
shares of redeemable convertible preferred stock held by Sun Healthcare.
 
We expect to use the remainder of the net proceeds for working capital and other
general corporate purposes, including potential acquisitions and costs to
support our leasing activities. We currently have no commitments or agreements
and are not involved in any negotiations for acquisitions of complementary
products, technologies or businesses.
 
The amounts that we actually expend on these matters will vary significantly,
depending on a number of factors, including future revenue growth, if any, and
the amount of cash we generate from operations. As a result, we will retain
broad discretion in the allocation of the net proceeds of this offering. Pending
use of the net proceeds of this offering, we intend to invest the net proceeds
in interest bearing, investment-grade securities.
 

                                DIVIDEND POLICY
 
We currently intend to retain future earnings, if any, to finance the expansion
of our business and do not anticipate paying any cash dividends on our common
stock in the foreseeable future. The terms of our line of credit prohibit the
payment of cash dividends on our capital stock without the consent of our
lender.
 
                                       15

<PAGE>

                                 CAPITALIZATION
 
The table below presents the following information:
 
    - our actual capitalization as of December 31, 2000; and
 
    - our pro forma as adjusted capitalization as of December 31, 2000 after
      giving effect to (i) the redemption of 540,600 shares of our redeemable
      convertible preferred stock and (ii) the conversion of 180,200 shares of
      our redeemable convertible preferred stock, all of our convertible
      preferred stock and a convertible note into shares of our common stock
      upon completion of this offering and to reflect the receipt and
      application of the net proceeds from our sale of          shares of common
      stock at an assumed initial public offering price of $     per share in
      this offering, less underwriting discounts and commissions and estimated
      offering expenses payable by us as discussed in "Use of Proceeds."
 
You should read this table in conjunction with the financial statements and the
other financial information included in this prospectus.
 

<TABLE>
<CAPTION>
                                                                DECEMBER 31, 2000
                                                              ----------------------
                                                                          PRO FORMA
                                                               ACTUAL    AS ADJUSTED
                                                              --------   -----------
                                                                  (in thousands)
<S>                                                           <C>        <C>
Cash, cash equivalents and short-term investments...........  $ 11,967     $
                                                              ========     ========
Long-term obligations, net of current portion...............  $  9,218     $
Redeemable convertible preferred stock, no par value;
  1,802,000 shares designated, 720,800 shares issued and
  outstanding, actual; none, pro forma as adjusted..........    10,113           --
Stockholders' equity (net capital deficiency):
  Convertible preferred stock, no par value; 18,500,000
    shares authorized (including 1,802,000 shares designated
    as redeemable convertible preferred stock); 14,538,376
    shares issued and outstanding, actual; 5,000,000 shares
    authorized, no shares issued and outstanding, pro forma
    as adjusted.............................................    62,392           --
  Common stock, no par value, 35,000,000 shares authorized,
    3,080,140 shares issued and outstanding, actual;
    50,000,000 shares authorized, 14,796,082 shares issued
    and outstanding, pro forma as adjusted..................     9,137
  Notes receivable from stockholders........................    (4,578)
  Accumulated deficit.......................................   (96,030)
  Accumulated other comprehensive income....................         4
                                                              --------     --------
    Total stockholders' equity (net capital deficiency).....   (29,075)
                                                              --------     --------
      Total capitalization..................................  $ (9,744)    $
                                                              ========     ========
</TABLE>

 
This table excludes the following shares issued or issuable as of February 28,
2001:
 
    - 3,678,336 shares of our common stock issuable upon exercise of outstanding
      options;
 
    - 102,183 shares of our common stock issuable upon exercise of outstanding
      warrants;
 
    - 1,067,776 shares of common stock reserved for issuance under our equity
      incentive plans; and
 
    - 174,488 shares of common stock reserved for issuance under our employee
      stock purchase plan.
 
Upon completion of the offering, 540,600 of the shares of redeemable convertible
preferred stock will be redeemed in accordance with their terms and the
remaining 180,200 shares of redeemable convertible preferred stock will convert
into 133,191 shares of common stock (assuming the price per share to the public,
prior to deducting the underwriter commissions and offering expenses, is more
than $11.78), and the 14,538,376 shares of convertible preferred stock will
convert into 11,714,782 shares of common stock.
 
                                       16

<PAGE>
                                    DILUTION
 
Our pro forma net tangible book value (deficiency) as of December 31, 2000, was
approximately $(18.3) million, or $(1.27) per share. Pro forma net tangible book
value (deficiency) per share represents the amount of pro forma stockholders'
equity (or net capital deficiency), assuming (i) the redemption of 540,600
shares of our redeemable convertible preferred stock and (ii) the conversion of
180,200 shares of our redeemable convertible preferred stock, all of our
convertible preferred stock and a convertible note into common stock, less
intangible assets, divided by the pro forma number of shares of common stock
outstanding as of December 31, 2000. Dilution per share represents the
difference between the amount per share paid by purchasers of shares of common
stock in this offering and the pro forma net tangible book value per share of
common stock immediately after completion of this offering.
 
Pro forma net tangible book value as of December 31, 2000, after giving effect
to the sale of          shares of common stock offered by us at an initial
public offering price of $     per share and after deducting underwriting
discounts and commissions and estimated offering expenses payable by us, would
have been approximately $    million, or approximately $    per share. This
represents an immediate increase in pro forma net tangible book value of $
per share to existing stockholders and an immediate dilution in pro forma net
tangible book value of $     per share to investors purchasing our common stock
in this offering, as illustrated in the following table:
 

<TABLE>
<CAPTION>
 
<S>                                                           <C>        <C>
Assumed initial public offering price per share.............              $
  Pro forma net tangible book value (deficiency) per share
    as of December 31, 2000.................................
  Increase per share attributable to new investors..........
                                                               ------
Pro forma net tangible book value per share after this
  offering..................................................
                                                                          ------
Pro forma dilution per share to new investors...............              $
                                                                          ======
</TABLE>

 
The table below summarizes, on a pro forma basis, the differences between our
existing stockholders and the new investors purchasing our common stock in this
offering with respect to the total number of shares purchased from us, the total
consideration paid and the average price per share paid, based upon an initial
public offering price of $     per share.
 

<TABLE>
<CAPTION>
                                             SHARES PURCHASED       TOTAL CONSIDERATION
                                           ---------------------   ----------------------   AVERAGE PRICE
                                             NUMBER     PERCENT      AMOUNT      PERCENT      PER SHARE
                                           ----------   --------   -----------   --------   -------------
<S>                                        <C>          <C>        <C>           <C>        <C>
Existing stockholders....................  14,796,082        %     $80,916,000        %         $5.47
 
New investors............................
                                           ----------     ---      -----------     ---          -----
 
  Total..................................                 100%     $               100%
                                           ==========     ===      ===========     ===
</TABLE>

 
The above discussion and tables assume no exercise of stock options after
December 31, 2000.
 
If the underwriters exercise their over-allotment in full, the following will
occur:
 
    - the number of shares of common stock held by existing stockholders will
      decrease to approximately   % of the total number of shares of our common
      stock outstanding; and
 
    - the number of shares held by new investors will increase to
      shares, or approximately   % of the total number of our common stock
      outstanding after this offering.
 
                                       17

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
 
To aid you in your analysis, we are providing the following information. We
derived the selected consolidated financial data as of December 31, 1999 and
2000 and for the years ended December 31, 1998, 1999 and 2000 from our audited
consolidated financial statements included elsewhere in this prospectus. The
selected consolidated financial data as of December 31, 1996, 1997 and 1998 and
for the years ended December 31, 1996 and 1997 are derived from audited
consolidated financial statements not included in this prospectus. The pro forma
net loss per common share and shares used in computing pro forma net loss per
share are calculated as if (i) redemption of 540,600 shares of our redeemable
convertible preferred stock and (ii) conversion of 180,200 shares of our
redeemable convertible preferred stock, all of our convertible preferred stock
and a convertible note into shares of our common stock occur on the date of
their issuance. The other data, although not derived from our financial
statements, was derived from a customer information database. When you read this
selected consolidated financial data, it is important that you also read the
historical consolidated financial statements and related Notes included in this
prospectus, as well as the section of this prospectus entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
 

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                              ----------------------------------------------------
                                                1996       1997       1998     1999(1)    2000(2)
                                              --------   --------   --------   --------   --------
                                                (in thousands, except per share and other data)
<S>                                           <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Product revenues............................  $ 18,958   $ 26,683   $34,690    $ 42,184   $ 55,303
Product revenues from related party(3)......     1,551      6,864     9,398       4,163      1,097
Service and other revenues..................     1,045      2,526     4,124       7,034      7,810
                                              --------   --------   -------    --------   --------
    Total revenues..........................    21,554     36,073    48,212      53,381     64,210
Cost of product revenues....................     9,883     15,155    16,343      28,503     18,280
Cost of service and other revenues..........       760      1,417     1,801       5,377      7,722
                                              --------   --------   -------    --------   --------
    Total cost of revenues(4)...............    10,643     16,572    18,144      33,880     26,002
                                              --------   --------   -------    --------   --------
Gross profit................................    10,911     19,501    30,068      19,501     38,208
Operating expenses:
  Research and development..................     4,052      5,922     5,987       8,745     11,276
  Selling, general and administrative.......    18,013     24,520    24,292      35,797     45,320
  Integration...............................        --         --        --         785         --
  Restructuring.............................        --         --        --          --      2,908
                                              --------   --------   -------    --------   --------
    Total operating expenses................    22,065     30,442    30,279      45,327     59,504
                                              --------   --------   -------    --------   --------
Loss from operations(5).....................   (11,154)   (10,941)     (211)    (25,826)   (21,296)
Interest income (expense), net..............       694        953     1,039      (1,767)    (1,156)
                                              --------   --------   -------    --------   --------
Income (loss) before income taxes...........   (10,460)    (9,988)      828     (27,593)   (22,452)
Provision for income taxes..................        --        201       185         149        100
                                              --------   --------   -------    --------   --------
Net income (loss)...........................  $(10,460)  $(10,189)  $   643    $(27,742)  $(22,552)
                                              ========   ========   =======    ========   ========
Preferred stock accretion...................       (11)       (22)      (22)         --         --
Net income (loss) applicable to common
  stockholders..............................  $(10,471)  $(10,211)  $   621    $(27,742)  $(22,552)
                                              ========   ========   =======    ========   ========
Net income (loss) per common share:
  Basic.....................................  $ (10.39)  $  (8.93)  $  0.48    $ (18.86)  $ (13.23)
                                              ========   ========   =======    ========   ========
  Diluted...................................  $ (10.39)  $  (8.93)  $  0.06    $ (18.86)  $ (13.23)
                                              ========   ========   =======    ========   ========
  Pro forma basic and diluted (unaudited)...                                              $  (1.57)
                                                                                          ========
 
Weighted average common shares outstanding:
  Basic.....................................     1,008      1,144     1,302       1,471      1,704
  Diluted...................................     1,008      1,144    11,013       1,471      1,704
  Pro forma basic and diluted (unaudited)...                                                14,403
</TABLE>

 
                                       18

<PAGE>
 

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                              ----------------------------------------------------
                                                1996       1997       1998     1999(1)    2000(2)
                                              --------   --------   --------   --------   --------
                                                                 (in thousands)
<S>                                           <C>        <C>        <C>        <C>        <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term
  investments...............................  $20,821    $ 16,540   $ 22,072   $  6,698   $ 11,967
Total assets................................   37,246      43,227     46,498     37,117     43,905
Deferred gross profit(6)....................    7,883      17,958     21,099     28,167     29,898
Long-term obligations, net of current
  portion...................................      160         160         67      9,252      9,218
Redeemable convertible preferred stock......   25,238      25,260     25,282     15,166     10,113
Total stockholders' equity
  (net capital deficiency)..................  $(2,295)   $(11,730)  $(10,471)  $(37,320)  $(29,075)
 
OTHER DATA(7):
Cumulative number of sites of installed
  pharmacy and supply systems...............      119         176        258        910      1,096
Cumulative number of installed pharmacy and
  supply systems............................    2,227       3,928      5,875     14,242     17,772
</TABLE>

 
------------------------------
 
(1)  The amounts shown for the year ended December 31, 1999 include the results
     of the Sure-Med acquisition from January 29, 1999 to the end of 1999.
 
(2)  The amounts shown for the year ended December 31, 2000 include special
     charges in the third quarter of 2000 related to: restructuring
    activities--$2.0 million writedown of Commerce One MarketSite software
    license, $0.6 million in employee severance expenses and $0.3 million
    writedown of capitalized software development costs; recognition of
    $1.1 million expense associated with previously deferred offering expenses;
    and $0.2 million writedown of identified intangible assets remaining from
    the Sure-Med acquisition.
 
(3)  These revenues represent revenues from Sun Healthcare which was formerly a
     related party to Omnicell.
 
(4)  Cost of revenues for the year ended December 31, 1999 includes: special
     charges related to the writedown of Sure-Med inventory--$9.7 million;
    purchase accounting adjustment due to the sale of Sure-Med inventories that
    had been written up to fair value--$1.1 million; and costs incurred to
    complete Sure-Med installation obligations--$0.8 million.
 
(5)  Loss from operations for the year ended December 31, 1999 includes:
     integration expenses associated with the Sure-Med acquisition--$0.8
    million; and write-off of an equity investment--$0.6 million.
 
(6)  Deferred gross profit represents gross profit on sales of pharmacy and
     supply systems, excluding installation cost, that have been shipped to,
    accepted and, in most instances, paid for by our customer but not yet
    installed at the customer site. The revenues and cost of revenues for such
    items will be recorded upon completion of installation.
 
(7)  Figures do not include systems installed at Sun Healthcare sites.
 
                                       19

<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
YOU SHOULD READ THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS
OF OPERATIONS IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES TO
THOSE STATEMENTS INCLUDED ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION AND
ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISK, UNCERTAINTIES
AND ASSUMPTIONS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF MANY FACTORS, INCLUDING BUT
NOT LIMITED TO THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS
PROSPECTUS.
 
OVERVIEW
 
We were formed in 1992 and began offering our supply systems for sale in 1993.
In late 1996, we introduced our Omnicell pharmacy system. In January 1999, we
expanded our line of pharmacy systems and customer base with the acquisition of
the Sure-Med product line from Baxter Healthcare. As of February 28, 2001, we
have installed approximately 18,000 of our pharmacy and supply systems in over
1,100 healthcare facilities.
 
We sell our pharmacy and supply systems primarily in the United States. We have
a direct sales force organized into six regions in the United States and Canada.
We sell through distributors in Europe, the Middle East, Asia and Australia. We
manufacture the majority of our systems in our production facility in Palo Alto,
California, with refurbishment and spare parts activities conducted in our
Waukegan, Illinois facility.
 
Sun Healthcare, a formerly related party, was previously a significant customer
of ours, representing 19.7% of our total revenues in 1997, 20.5% in 1998, 9.6%
in 1999 and 2.9% in 2000. Sun Healthcare filed for Chapter 11 bankruptcy
protection in the third quarter of 1999. We do not anticipate any significant
revenue from Sun Healthcare in 2001 or in future years.
 
REVENUES
 
Customers acquire our pharmacy and supply systems either through an outright
purchase or a non-cancelable long-term lease, which typically has a term of
60 months. We bill our customers upon delivery and acceptance of our pharmacy
and supply systems and recognize revenue when the systems are installed.
Generally, we try to install our pharmacy and supply systems within three to six
months after shipment, but installation, at the customer's request, can be
delayed for a year or more. Some customers experience delays in installation due
to site construction and delays in receiving interfaces from third parties.
 
Typically, we will sell our customer lease agreements on a non-recourse basis to
third-party leasing companies. Lease revenue is recognized in the amount funded
by the leasing company. As part of the initial sale of our pharmacy and supply
systems, customers typically sign a one-year service agreement, and service
revenues are recognized over the term of these agreements. Service and other
revenues also include month to month rentals of our pharmacy and supply systems
and monthly subscription fees from our Internet-based procurement application.
 
Deferred gross profit on our balance sheet represents pharmacy and supply
systems that have been shipped to, accepted, and, in most instances, paid for by
our customers but not yet installed at the customer site. We record these
shipments as deferred gross profit because title to the inventory has passed to
the customer. Deferred gross profit is not equal to gross margin because it does
not include installation costs, which are incurred and recorded in the period
when revenue is recognized. Our installation process typically takes a week or
less to complete.
 
Revenues from our pharmacy and supply systems are difficult to forecast because
the sales cycle, from initial assessment to product installation, involves a
significant commitment of capital and time, varies
 
                                       20

<PAGE>
substantially from customer to customer and can take more than one year. The
order approval process of our customers is subject to internal procedures
associated with large capital expenditures and the time associated with
accepting new technologies. For these and other reasons, the sales cycle
associated with the purchase of our pharmacy and supply systems is typically
lengthy and subject to a number of significant risks, including customers'
budgetary constraints and internal acceptance reviews over which we have little
or no control.
 
In part due to our acquisition of the Sure-Med product line from Baxter
Healthcare, sales of pharmacy systems have grown, in dollar terms, from 23% of
our product shipments in 1997 to 40% in 2000. As of December 31, 2000, we had
generated only minimal revenues from subscription fees for our OmniBuyer
application. We intend to generate additional revenue from consulting fees for
installation and integration services for OmniBuyer.
 
COSTS AND EXPENSES
 
Our current expense levels are based, in part, on our expectations of higher
future revenue levels. If revenue levels are below expectations, operating
results are likely to be disproportionately impacted given our significant
investment in infrastructure. We have never achieved profitability on an annual
operating basis, and our current revenues and gross profit are not sufficient to
support our operating expenses. Based on the foregoing, we believe that period
to period comparisons of our results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance.
 
Cost of product revenues consists primarily of direct materials, labor and
overhead required to manufacture pharmacy and supply systems and also includes
costs required to install our systems at the customer location. Costs of service
and other revenue include spare parts required to maintain and support installed
systems and service and maintenance expense, including outsourced contract
services. Direct materials and installation costs are mostly variable.
Manufacturing labor and overhead remain relatively fixed over ranges of
production volume. The cost of service and spare parts has increased as the size
of our installed base of customers increases.
 
Our research and development expenses include engineering and development
salaries, wages and benefits, prototyping and laboratory expenses, consulting
expenses and engineering-related facilities and overhead charges. Most of the
research and development expenses are personnel- or facilities-related and are
relatively fixed. Prototyping and consulting expenses will vary depending on the
stage of completion of various engineering and development projects.
 
Our selling, general and administrative expenses include costs to support the
sales, marketing, field operations and customer support and administration
organizations. Most of these costs are personnel- or facilities-related and are
relatively fixed. Bonuses and sales commissions will typically change in
proportion to revenue or profitability. Other expenditures, such as advertising,
promotions and consulting, are neither fixed nor variable and will fluctuate
depending on product introductions, promotional programs and trade shows.
 
Due to relatively low demand for our Internet-based procurement application,
OmniBuyer, we restructured our e-commerce business in the third quarter of 2000
and reduced operating expenses. In particular, we decreased the number of
employees in this area and lowered our spending on sales, marketing and research
and development. We decided not to pursue an exchange based on the Commerce One
MarketSite license and refocused on marketing OmniBuyer to our hospital and
alternate care customers. As part of this restructuring, we recorded a charge of
$2.9 million, comprised of a $2.0 million writedown of our Commerce One
MarketSite license, $0.6 million in employee severance-related expenses and a
$0.3 million writedown of previously capitalized software.
 
                                       21

<PAGE>
RESULTS OF OPERATIONS
 
The following table sets forth certain items included in our results of
operations for each of the three years in the period ended December 31, 2000,
expressed as a percentage of our total revenues for these periods:
 

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
STATEMENT OF OPERATIONS:
Product revenues............................................    91.4%      86.8%      87.8%
Service and other revenues..................................     8.6       13.2       12.2
                                                               -----      -----      -----
  Total revenues............................................   100.0      100.0      100.0
 
Cost of product revenues....................................    33.9       53.4       28.5
Cost of service and other revenues..........................     3.7       10.1       12.0
                                                               -----      -----      -----
    Total cost of revenues..................................    37.6       63.5       40.5
                                                               -----      -----      -----
 
Gross profit................................................    62.4       36.5       59.5
Operating expenses:
  Research and development..................................    12.4       16.4       17.6
  Selling, general and administrative.......................    50.4       67.1       70.6
  Integration...............................................      --        1.4         --
  Restructuring.............................................      --         --        4.5
                                                               -----      -----      -----
    Total operating expenses................................    62.8       84.9       92.7
 
Loss from operations........................................    (0.4)     (48.4)     (33.2)
Interest income (expense), net..............................     2.1       (3.3)      (1.8)
                                                               -----      -----      -----
Income (loss) before provision for income taxes.............     1.7      (51.7)     (35.0)
Provision for income taxes..................................     0.4        0.3        0.1
                                                               -----      -----      -----
Net income (loss)...........................................     1.3      (52.0)     (35.1)
                                                               =====      =====      =====
 
Net income (loss) applicable to common stockholders.........     1.3      (52.0)     (35.1)
                                                               =====      =====      =====
</TABLE>

 
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
 
REVENUES.  Total revenues increased 20.3% from $53.4 million for the year ended
December 31, 1999 to $64.2 million for the year ended December 31, 2000. Total
revenues increased 10.7% from $48.2 million for the year ended December 31, 1998
to $53.4 million for the year ended December 31, 1999.
 
Product revenues increased by 21.7% from $46.3 million in 1999 to $56.4 million
in 2000, due primarily to a change in our product mix to a larger proportion of
higher-priced pharmacy systems from 1999 to 2000 and an increase in the number
of pharmacy and supply systems installed from 1999 to 2000. Product revenues
increased by 5.1% from $44.1 million in 1998 to $46.3 million in 1999, due to an
increase in the number of pharmacy and supply systems installed from 1998 to
1999 partially offset by sales of a larger proportion of supply systems from
1998 to 1999. Our slower rate of product revenue growth in 1999 compared to
preceding years was due to our largest customer Sun Healthcare's financial
difficulties and by delays in purchase decisions by other customers over
concerns related to Year 2000.
 
Service and other revenues increased by 11.0% from $7.0 million in 1999 to
$7.8 million in 2000. This increase was due to a higher installed base of
systems partially offset by lower service revenue from Sun Healthcare. Under the
terms of the Sure-Med acquisition, we assumed from Baxter Healthcare the
remaining service obligations to certain Sure-Med lease customers, but we do not
receive any service
 
                                       22

<PAGE>
revenue associated with such obligations. Service and other revenues increased
by 70.6% from $4.1 million in 1998 to $7.0 million in 1999. The increase in
service and other revenues in 1999 was due primarily to the increase in our
installed base of pharmacy and supply systems. We anticipate that service and
other revenues will continue to grow in dollar terms and as a percentage of our
total revenues due to continued growth in our installed base of pharmacy and
supply systems.
 
Deferred gross profit increased by 6.1% from $28.2 million at December 31, 1999
to $29.9 million at December 31, 2000 due to slightly more shipments of pharmacy
and supply systems than installations during 2000. Deferred gross profit
increased by 33.5% from $21.1 million at December 31, 1998 to $28.2 million at
December 31, 1999 due to significantly more shipments of pharmacy and supply
systems than installations during 1999. We anticipate that deferred gross profit
will remain relatively constant with the December 31, 2000 balance due to
shipments approximating installations in future periods. Delays in installation
occur for a variety of reasons, including construction delays and delays in
receiving software from third party vendors. We recognize revenue and reduce
deferred gross profit when installation is complete.
 
COST OF REVENUES.  Cost of product revenues decreased by 35.9% from
$28.5 million in 1999 to $18.3 million in 2000. Gross profit on product revenues
was $17.8 million, or 38.5% of product revenues in 1999, compared to
$38.1 million, or 67.6% of product revenues in 2000. The 2000 decrease in cost
of product revenues and increase in gross profit percentage were due primarily
to a $9.7 million writedown of Sure-Med inventory in the fourth quarter of 1999
because of lower than anticipated demand for Sure-Med pharmacy systems.
Subsequent to the January 1999 acquisition of the Sure-Med product line, product
integration issues related to the Sure-Med acquisition slowed our sales force's
ability to effectively sell the Sure-Med pharmacy systems. Cost of product
revenues increased by 74.4% from $16.3 million in 1998 to $28.5 million in 1999.
Gross profit on product revenues was $27.7 million, or 62.9% of product revenues
in 1998 compared to $17.8 million, or 38.5% of product revenues in 1999. The
1999 increase in cost of product revenues was due primarily to the writedown of
Sure-Med inventory. Cost of product revenues and gross profit on product
revenues in 1999 were also adversely affected by the minimal gross profit
recorded on sales of Sure-Med inventories that had been written up to fair value
upon the acquisition.
 
Excluding the impact of the Sure-Med inventory and other writedowns, cost of
product revenues increased modestly to $17.7 million for 1999 compared to
$16.3 million in 1998, reflecting an increase in the number of systems installed
and higher manufacturing costs per unit. As a percent of product revenues, cost
of product revenues, excluding the impact of the Sure-Med inventory and other
writedowns, increased from 37.1% in 1998 to 38.2% in 1999.
 
Cost of service and other revenues increased by 43.6% from $5.4 million in 1999
to $7.7 million in 2000. The decline in gross profit on service and other
revenue in 2000 compared to 1999 was due to service and maintenance costs on
Sure-Med units sold prior to the acquisition, for which we did not receive
revenue, being significantly higher than our original estimates reflected in the
purchase price allocation. For the same periods, gross profit on service and
other revenues was $1.7 million, or 23.6% of service and other revenues in 1999
compared to $0.1 million, or 1.1% of service and other revenues in 2000. Cost of
service and other revenues increased by 198.6% from $1.8 million in 1998 to
$5.4 million in 1999. For the same periods, gross profit on service and other
revenues was $2.3 million, or 56.3% of service and other revenues in 1998
compared to $1.7 million or 23.6% of service and other revenues in 1999. The
lower gross profit on service and other revenues in 1999 compared to 1998 was
due primarily to the acquisition of the Sure-Med product line and the higher
level of service required for the Sure-Med pharmacy systems.
 
RESEARCH AND DEVELOPMENT.  Research and development expenses increased by 28.9%
from $8.7 million in 1999 to $11.3 million in 2000. Research and development
expenses represented 16.4% and 17.6% of total revenues in 1999 and 2000,
respectively. The increase in research and development expenses was
 
                                       23

<PAGE>
primarily attributable to higher costs associated with additional engineering
for enhancements to our pharmacy systems and for customization of Commerce One's
technology for OmniBuyer customers. We anticipate that we will continue to
commit significant resources to research and development in future periods to
enhance and extend our pharmacy and supply systems. We expect that research and
development expenses will increase in overall dollars, but not as a percentage
of total revenues from current levels. To date, we have capitalized
approximately $0.9 million of software development costs in 2000 for our
pharmacy and supply systems.
 
Research and development expenses increased by 46.1% from $6.0 million in 1998
to $8.7 million in 1999. Research and development expenses represented 12.4% and
16.4% of total revenues in 1998 and 1999, respectively. The increase in research
and development expenses was primarily attributable to higher costs associated
with additional engineering personnel retained as part of the acquisition of the
Sure-Med product line from Baxter Healthcare.
 
SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative costs
increased by 26.6% from $35.8 million in 1999 to $45.3 million in 2000. Selling,
general and administrative expenses represented 67.1% and 70.6% of total
revenues in 1999 and 2000, respectively. The increase in selling, general and
administrative expenses is due primarily to staffing increases associated with
the introduction of OmniBuyer and supporting the growth of our pharmacy and
supply system business. In addition, we wrote off approximately $1.1 million in
previously capitalized offering expenses. We anticipate that we will continue to
commit significant resources to our sales, customer support, marketing, finance
and administration organizations. We expect that selling, general and
administrative expenses will continue to increase in dollar terms. However, we
do not anticipate that selling, general and administrative expenses will
increase significantly, if at all, as a percentage of total revenues.
 
Selling, general and administrative costs increased by 47.4% from $24.3 million
in 1998 to $35.8 million in 1999. Selling, general and administrative expenses
represented 50.4% and 67.1% of total revenues in 1998 and 1999, respectively.
The increase in selling, general and administrative expenses is due to staffing
increases necessary to manage and support our growth in revenues, as well as
increased staffing as a result of the acquisition of the Sure-Med product line
from Baxter Healthcare. Also included in selling, general and administrative
costs in 1999 is $0.6 million relating to the write-off of an equity investment.
 
INTEGRATION.  Integration expenses of $0.8 million in 1999 consist of costs
associated with the integration of Omnicell and Sure-Med engineering efforts,
product lines and marketing efforts.
 
RESTRUCTURING.  Restructuring charges in 2000 of $2.9 million include the
$2.0 million write-off of the Commerce One MarketSite license, $0.3 million
write-off of capitalized software development costs and $0.6 million in employee
severance and related expenses.
 
INTEREST INCOME (EXPENSE).  Net interest expense was $1.8 million in 1999
compared to net interest expense of $1.2 million in 2000. The lower net interest
expense was primarily due to an increase in interest income from employee loans
in 2000 as well as higher average cash balances than in 1999 and a reduction in
interest paid to Sun Healthcare due to lower average outstanding balances of
redeemable preferred stock. Net interest income was $1.0 million in 1998
compared to net interest expense of $1.8 million in 1999, reflecting a reduction
in interest income due to a decrease in cash, cash equivalents and short-term
investment balances and an increase in interest expense due to debt obligations
incurred as part of the Sure-Med acquisition, as well as interest paid to Sun
Healthcare for redemption of its redeemable preferred stock.
 
QUARTERLY RESULTS OF OPERATIONS
 
In any given quarter, it is common for a few customers to make up a substantial
percentage of our pharmacy and supply systems revenues, although the identity of
such customers generally varies from
 
                                       24

<PAGE>
quarter to quarter. The timing of purchase decisions by large hospital customers
has a material impact on our deferred gross profit position but a less
significant impact on quarterly results of operations which depend on our
ability to install systems that have already been shipped to customers.
 
Our quarterly operating results have varied significantly in the past and may
vary significantly in the future depending on many factors that may include, but
are not limited to, the following:
 
    - the size and timing of significant orders and their fulfillment and
      installation;
 
    - changes in pricing policies by us or our competitors;
 
    - the number, timing and significance of product enhancements and new
      product announcements by us or our competitors;
 
    - changes in the level of our operating expenses;
 
    - our customers' budgeting cycles; and
 
    - changes in our strategy and general domestic and international economic
      and political conditions.
 
The following tables present certain unaudited statement of operations data for
each quarter of 1999 and 2000. These data have been derived from unaudited
consolidated financial statements and have been prepared on the same basis as
our audited consolidated financial statements which appear elsewhere in this
prospectus. In the opinion of our management, these data include all
adjustments,
 
                                       25

<PAGE>
consisting only of normal recurring adjustments and, in the fourth quarter of
1999 and third quarter of 2000, special charges described below, necessary for a
fair presentation of such data.
 

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                 -------------------------------------------------------------------------------------
                                 MAR 31,    JUN 30,    SEP 30,    DEC 31,    MAR 31,    JUN 30,    SEPT 30,   DEC 31,
                                   1999       1999       1999       1999       2000       2000       2000       2000
                                 --------   --------   --------   --------   --------   --------   --------   --------
                                                                    (in thousands)
<S>                              <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Product revenues...............  $ 7,694    $ 8,898    $10,976    $ 14,616   $12,128    $13,727    $13,891    $15,557
Product revenues from related
  party........................    3,090        840        181          52        --         --      1,097         --
Service and other revenues.....    1,339      1,784      2,098       1,813     2,034      1,853      2,032      1,891
                                 -------    -------    -------    --------   -------    -------    -------    -------
Total revenues.................   12,123     11,522     13,255      16,481    14,162     15,580     17,020     17,448
Cost of product revenues(1)....    3,503      3,500      3,850      17,650     4,523      3,854      4,876      5,027
Cost of service and other
  revenues(2)..................      901        731      1,317       2,428     2,097      2,124      1,627      1,874
                                 -------    -------    -------    --------   -------    -------    -------    -------
Total cost of revenues.........    4,404      4,231      5,167      20,078     6,620      5,978      6,503      6,901
                                 -------    -------    -------    --------   -------    -------    -------    -------
Gross profit (loss)............    7,719      7,291      8,088      (3,597)    7,542      9,602     10,517     10,547
 
OPERATING EXPENSES:
  Research and development.....    1,819      2,078      2,505       2,343     3,455      2,500      2,621      2,700
  Selling, general and
    administrative(3)..........    7,862      8,400      9,426      10,109    11,401     11,856     11,600     10,463
  Integration..................      286        362        137          --        --         --         --         --
  Restructuring(4).............       --         --         --          --        --         --      2,908         --
                                 -------    -------    -------    --------   -------    -------    -------    -------
    Total operating expenses...    9,967     10,840     12,068      12,452    14,856     14,356     17,129     13,163
                                 -------    -------    -------    --------   -------    -------    -------    -------
Loss from operations...........   (2,248)    (3,549)    (3,980)    (16,049)   (7,314)    (4,754)    (6,612)    (2,616)
Interest expense, net..........     (374)      (521)      (569)       (303)     (321)      (221)      (506)      (108)
                                 -------    -------    -------    --------   -------    -------    -------    -------
Loss before provision for
  income taxes.................   (2,622)    (4,070)    (4,549)    (16,352)   (7,635)    (4,975)    (7,118)    (2,724)
Provision for income taxes.....       24         40         --          85        25         25         25         25
                                 -------    -------    -------    --------   -------    -------    -------    -------
Net loss.......................  $(2,646)   $(4,110)   $(4,549)   $(16,437)  $(7,660)   $(5,000)   $(7,143)   $(2,749)
                                 =======    =======    =======    ========   =======    =======    =======    =======
</TABLE>

 
------------------------------
 
(1)  Includes special charges in the fourth quarter of 1999 related to:
     writedown of Sure-Med inventory--$9.7 million; purchase accounting
    adjustment due to the sale of Sure-Med inventories that had been written up
    to fair value--$1.1 million; and costs incurred to complete Sure-Med
    installation obligations--$0.8 million.
 
(2)  Includes a special charge in the fourth quarter of 1999 for costs incurred
     to complete Sure-Med installation obligations--$0.8 million.
 
(3)  Includes a special charge in the fourth quarter of 1999 related to the
     write-off of an equity investment--$0.6 million. Includes special charges
    in the third quarter of 2000 related to a $1.1 million expense associated
    with previously deferred offering expenses and a $0.2 million writedown of
    identifiable intangible assets remaining from the Sure-Med acquisition.
 
(4)  Includes special charges in the third quarter of 2000 related to:
     $2.0 million writedown of Commerce One MarketSite software license;
    $0.6 million in employee severance expenses; and $0.3 million writedown of
    capitalized software development costs.
 
LIQUIDITY AND CAPITAL RESOURCES
 
We have financed our operations since inception primarily through the private
placement of equity securities, as well as through equipment financing and
secured loan arrangements. Through December 31, 2000, we have raised
approximately $77.5 million from the private placement of equity securities, net
of redemptions. This includes net proceeds of approximately $28.6 million from
our last equity financing in the first quarter of 2000.
 
                                       26

<PAGE>
As of December 31, 2000, our principal sources of liquidity included
approximately $12.0 million in cash, cash equivalents and short-term investments
and an undrawn $10.0 million revolving credit facility. Our funds are currently
invested in U.S. Treasury and government agency obligations, investment grade
commercial paper and short-term interest-bearing securities.
 
In connection with the acquisition of the Sure-Med product line, we incurred a
note payable to Baxter Healthcare of approximately $7.9 million. The note is
secured by substantially all of the assets supporting the Sure-Med product line.
The note is for a term of five years and is repayable in eight equal quarterly
installments beginning on March 31, 2002, or earlier upon the closing of an
initial public offering. Interest payments are due quarterly at a rate of 8.0%.
We expect to utilize a portion of the proceeds from this offering to repay the
Baxter Healthcare note in full.
 
We have established a credit facility with a bank that provides us with advances
of up to 75% of eligible receivables, as defined, up to $10.0 million, and
expires on April 27, 2001. Any advances under the credit facility would be
secured by substantially all of our assets. Interest under the credit agreement
is payable at an annual rate equal to our lender's prime rate plus 2.25%. Our
credit agreement contains covenants that include limitations on indebtedness and
liens, in addition to thresholds relating to net capital deficiencies and ratios
that define borrowing availability and restrictions on the payment of dividends.
As of December 31, 2000, we had no borrowings under this credit facility, were
eligible to borrow approximately $4.4 million, and were in compliance with the
covenants.
 
We used cash of $19.2 million in operating activities in 2000 compared to
$5.0 million used in operating activities in 1999 and $6.7 million provided by
operating activities in 1998. The net loss of $22.6 million for 2000 included
non-cash charges for depreciation and amortization of $2.8 million, non-cash
stock compensation charges of $0.7 million and an increase of deferred gross
profit of $1.7 million. The net loss of $27.7 million for 1999 included non-cash
charges for depreciation and amortization of $2.0 million, Sure-Med pharmacy
systems inventory write-off of $9.7 million, an investment writedown of
$0.6 million, and an increase in deferred gross profit of $7.4 million. In 1998,
cash was provided by net income of $0.6 million, a decrease in accounts
receivable of $2.1 million and an increase in deferred gross profit of
$4.0 million
 
Cash of $1.4 million was provided from investing activities in 2000 compared to
cash of $0.2 million used in investing activities in 1999 and cash of
$7.3 million used in investing activities in 1998. Net maturities of short-term
investments were $1.9 million in 2000 and $6.4 million in 1999 compared to net
purchases of $5.5 million in 1998. Our 2000 expenditures for property and
equipment of $0.5 million was less than the $6.2 million expended in 1999 and
the $1.8 million expended in 1998. We generated cash from financing activities
of $24.9 million in 2000 primarily due to completing a private placement of
$28.5 million in Series K Preferred Stock partially offset by redemptions of
redeemable preferred stock. We used $3.8 million of cash in financing activities
in 1999 due primarily to redemption of redeemable preferred stock and
$0.6 million of cash was provided by financing activities in 1998 through the
issuance of common stock.
 
Through December 31, 2000, we had redeemed 1,081,200 shares of Series J
redeemable convertible preferred stock from Sun Healthcare for $15.2 million
plus interest of $2.7 million. Cash of $11.6 million was used to satisfy this
redemption, with the balance paid by offsetting Sun Healthcare's outstanding
accounts receivable balances. In January 1999, Sun Healthcare exercised its
right to have us redeem its 1,802,000 shares of Series J Preferred Stock in ten
equal quarterly installments beginning in March 1999. All payments have been
made except the three quarterly redemption payments of $2.5 million each that
were due in September 2000, December 2000 and March 2001, which we were not
obligated to make because we did not meet certain balance sheet tests under
California law. We plan to make these three payments, totaling $7.6 million,
with a portion of the proceeds from this offering.
 
                                       27

<PAGE>
We have not paid any significant amount of taxes to date. As of December 31,
2000, we have a net operating loss carryforward for U.S. income tax purposes of
approximately $38.0 million, expiring beginning in 2009. There are certain
limitations on the use of this net operating loss carryforward. For more
information, please see the notes to our consolidated financial statements.
 
We may be required to raise additional capital through the public equity market,
private financings, collaborative arrangements and debt. If additional capital
is raised through the issuance of equity or securities convertible into equity,
our stockholders may experience dilution, and such securities may have rights,
preferences or privileges senior to those of the holders of the common stock.
Additional financing may not be available to us on favorable terms, if at all.
If we are unable to obtain financing, or to obtain it on acceptable terms, we
may be unable to execute our business plan.
 
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET AND INTEREST RATE RISK
 
The following discusses our exposure to market risk related to changes in
interest rates, foreign currency exchange rates and equity prices. We reduce the
sensitivity of our results of operations to these risks by maintaining an
investment portfolio which is comprised solely of highly rated, short-term
investments. We do not hold or issue derivative, derivative commodity
instruments or other financial instruments for trading purposes. We are exposed
to currency exchange fluctuations, as we sell our products internationally. We
manage the sensitivity of our international sales by denominating all
transactions in U.S. dollars.
 
We are exposed to interest rate risk, as we use additional debt financing
periodically to fund capital expenditures. The interest rate that we may be able
to obtain on debt financings will depend on market conditions at that time and
may differ from the rates we have secured in the past.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
In March 2000, the Emerging Issues Task Force (EITF) published its consensus on
Issue No. 00-2, "Accounting for Web Site Development Costs." This EITF sets
forth guidance on whether to capitalize or expense certain development costs. We
have adopted EITF 00-2 effective January 1, 2000 and capitalized $260,000 of web
site development costs in the year ended December 31, 2000. These costs were
written off as a part of the 2000 restructuring activities.
 
In March, 2000, the FASB issued Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation," an interpretation of APB 25. The
Interpretation is applied prospectively to all new awards, modifications to
outstanding awards, and changes in employee status after July 1, 2000, with the
exception of the definition of employee and stock option repricings as to which
the effective date is December 15, 1998. The adoption of this Interpretation did
not have a significant effect on our results of operations or financial
condition.
 
In December 1999, the Securities and Exchange Commission issued SAB No. 101,
"Revenue Recognition in Financial Statements." SAB 101 provides guidance on the
recognition, presentation and disclosure of revenue in financial statements. We
have adopted SAB 101 for all periods presented.
 
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS 137 and 138, which is
effective for years beginning after June 15, 2000. SFAS 133, as amended, will
require us to recognize all derivatives on the balance sheet at fair value.
Gains or losses resulting from changes in the values of those derivatives would
be accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. SFAS 133 will be effective for our financial statements
for the year ended December 31, 2001. Management believes that this statement
will not have a significant effect on our results of operations or financial
condition.
 
                                       28

<PAGE>

 
                                   BUSINESS
 
OVERVIEW
 
We provide an integrated suite of clinical infrastructure and workflow
automation solutions for healthcare facilities. These solutions include pharmacy
and supply systems, clinical reference tools, an Internet-based procurement
application and decision support capabilities. We sell and lease our products
and related services to a wide range of healthcare facilities such as hospitals,
integrated delivery networks and alternate care facilities, which include
nursing homes, outpatient surgery centers, catheterization labs and clinics. As
of February 28, 2001, we had approximately 18,000 of our pharmacy and supply
systems installed in over 1,100 healthcare facilities in the United States. In
2000, we generated revenue of $64.2 million from the sale and lease of our
products and related services.
 
The healthcare industry's clinical workflow processes are highly inefficient and
predominantly manual. The industry's historical reluctance to invest in
information technology has contributed to medical errors and high process costs.
Our automation solutions are designed to enable healthcare facilities to reduce
medication errors, decrease costs, enhance operating efficiency and improve
patient care.
 
Our clinical infrastructure and workflow automation solutions enable healthcare
facilities to acquire, manage, dispense and deliver pharmaceuticals and medical
supplies more effectively and efficiently. Our pharmacy and supply systems
facilitate controlled delivery of pharmaceuticals and medical supplies directly
to clinicians at the point of care. Our Internet-based procurement application
automates and integrates healthcare facilities' requisition and approval
processes. Our decision support product provides healthcare facilities with the
ability to identify trends in drug utilization and diversion, improve regulatory
compliance and reduce costs by monitoring usage patterns and optimizing product
management.
 
Our goal is to become the leading provider of clinical infrastructure and
workflow automation solutions for the healthcare industry. We will continue to
be innovative in the expansion and enhancement of our product offerings. We also
intend to expand the adoption of our automation solutions by continuing to
collaborate with leading healthcare organizations. Furthermore, we believe our
sizable installed customer base provides us with a significant opportunity to
grow our business through increased sales to our existing customers.
 
INDUSTRY BACKGROUND
 
The healthcare delivery system in the United States is highly fragmented,
complex and inefficient. Despite significant advances in science and medical
technology, the clinical and management processes employed in healthcare
facilities have made little progress in the past 20 years. Presently, many major
clinical workflow processes at healthcare facilities are still predominantly
manual and paper-based, which reflect healthcare facilities' relatively limited
investment in information technology. Gartner, Inc., an independent market
research organization, estimates that for 2001 the healthcare industry will
invest only 1.6% of its revenue in information technology compared to 13.2% and
5.6% for the communications industry and retail industry, respectively.
 
Existing healthcare information systems are also limited in their ability to
support the modernization of healthcare delivery processes or to address
evolving patient safety initiatives, requirements of managed care and new
healthcare regulations. Today, most healthcare facilities' information systems
are oriented toward financial functions such as patient billing. These systems
generally do not provide current, real-time information that healthcare
providers need to make clinical and managerial decisions. Furthermore,
individual departments within the same healthcare facility or network frequently
purchase separate systems customized to their specific requirements, forcing the
healthcare facility to maintain disparate information systems that do not
operate or interface well with one another.
 
                                       29

<PAGE>
NEED FOR CLINICAL INFRASTRUCTURE SYSTEMS
 
In November 1999, the Institute of Medicine issued a report based on the results
of over 30 independent studies appearing in medical peer review journals over a
12-year period. The report indicated that medical errors are among the top ten
causes of death in the United States, accounting for more deaths than motor
vehicle accidents, breast cancer or AIDS. The report also indicated that in 1993
over 7,000 deaths resulted from medication errors. The following findings were
noted in the report:
 
    - A 1995 study of 4,031 adult admissions to 11 medical and surgical units at
      two hospitals estimated that an average of 1,900 adverse drug events occur
      per hospital per year, with 28% judged to be preventable.
 
    - The same 1995 study found that approximately three out of every four
      medication errors were caused by one of seven types of systems failures,
      including drug knowledge dissemination, dose and identity checking, order
      transcription and medication order tracking.
 
    - A 1997 study of two hospitals over a six-month period estimated that
      approximately 2% of admissions experienced a preventable adverse drug
      event, resulting in average increased hospital costs of $4,700 per adverse
      drug event admission or approximately $2.8 million annually for a 700-bed
      hospital.
 
In March 2001, the Institute of Medicine issued a follow-up report that
recommended increased investment in information technology as a means of
reducing medical errors and improving the overall quality of patient care.
 
Since the 1999 Institute of Medicine report was released, California has passed
legislation requiring the eventual adoption of technologies aimed at reducing
avoidable medication errors. Other states are considering similar legislation.
Additionally, a consortium of large employers known as the Leapfrog Group was
recently formed with the express purpose of pressuring healthcare facilities to
provide safer care for employees of Leapfrog member companies. The Leapfrog
Group's members, which include companies such as AT&T, Ford Motor Company,
General Electric, IBM and 3M, employ approximately 20 million people and spend
an estimated $40 billion annually on healthcare. One of the initiatives of the
Leapfrog Group is to encourage employees to use healthcare facilities that
invest in computerized systems designed to prevent avoidable medical errors.
 
In January 2001, the Joint Commission on Accreditation of Healthcare
Organizations (JCAHO), an independent, not-for-profit organization that
evaluates and accredits approximately 19,000 healthcare facilities in the United
States, approved standards directly focused on patient safety and medical error
reduction in healthcare facilities. Healthcare facilities seeking accreditation
from JCAHO are required to establish ongoing patient safety programs, including
the application of knowledge-based information to reduce risks to patients and
the creation of an environment that encourages identification of errors,
establishment of remedial steps to reduce the likelihood of recurring errors and
identification of risks to patients.
 
ECONOMIC PRESSURES ON HEALTHCARE FACILITIES
 
Throughout the 1990s, the increasing cost of providing healthcare led to the
rise of managed care. Healthcare providers aligned into networks and health
plans established guidelines for reimbursement for healthcare delivery, reducing
overall reimbursement rates. Federal policy in the United States also influenced
the economic climate of the healthcare industry. Passage of the Balanced Budget
Act of 1997 proposed a reduction of payments to healthcare providers of more
than $250 billion over a five-year period. This significantly reduced the
operating margins of healthcare facilities and limited their access to capital.
Although these pressures resulted in lower total spending on healthcare, many of
 
                                       30

<PAGE>
the larger systemic issues in the industry have not been adequately addressed,
including improving patient care and upgrading outdated information systems.
 
Economic pressures and the need to negotiate more effectively with managed care
organizations have also induced a wave of consolidation, both vertically and
horizontally, among healthcare providers to form newly defined delivery
organizations. Many of these newly created organizations expected to realize
significant economies of scale as a result of consolidation. These economies of
scale have not fully materialized, however, and new problems have emerged from
consolidation, including inefficiencies associated with managing disconnected
and disparate information systems. Integrated delivery networks are only now
beginning to address these issues.
 
Labor shortages in the U.S. healthcare market also have adversely impacted
patient care and accentuated the need for investment in information technology
to improve labor productivity. A December 2000 report from the U.S. Department
of Health and Human Services indicated that the United States is experiencing a
growing shortage of licensed pharmacists, a trend that it expects to continue.
According to the report, the shortage has resulted in less time for pharmacists
to counsel patients, longer working hours and a greater potential for
fatigue-related errors. Similarly, according to the American Organization of
Nurse Executives, most regions in the United States are also experiencing a
major nursing shortage. In February 2001, a survey by the American Nursing
Association revealed that 75% of nurses feel the quality of patient care has
declined over the past two years, and a majority of nurses cited inadequate
staffing as the primary cause of this decline.
 
THE OMNICELL SOLUTION
 
We provide an integrated suite of clinical infrastructure and workflow
automation solutions capable of enterprise-wide implementation by healthcare
providers. These solutions include pharmacy and supply systems, clinical
reference tools, an integrated Internet-based procurement application and
decision support capabilities. Our solutions enable healthcare providers to:
 
    - REDUCE MEDICATION ERRORS.  Our pharmacy systems (i) track clinician,
      patient and drug data, (ii) display a patient's full drug profile,
      (iii) alert clinicians to allergies and drug interactions and (iv) track
      late or missed doses. Our systems interface directly with a healthcare
      facility's clinical pharmacy system, facilitating the dissemination of
      clinical pharmacy data and effectively extending the pharmacist's control
      of dispensed pharmaceuticals to the point of care. Our pharmacy systems
      are equipped with a touch screen Web browser that provides direct access
      to a third-party drug information database. This functionality allows
      clinicians to review information on dosage, administration,
      contra-indications and drug interactions at the point of care. Our
      pharmacy systems also support drug error detection by providing direct
      access, via the Internet, to medication error reporting and analysis
      software.
 
    - REDUCE COSTS.  Our pharmacy and supply systems store pharmaceuticals and
      medical supplies in a closed, controlled environment. By requiring a
      caregiver to enter their identification code and select a patient's name
      before removing a pharmaceutical or supply, only the items needed for each
      particular patient procedure are removed. This ensures that items are
      allocated properly and charged to the appropriate patient. Our automation
      systems also capture data on product utilization and inventory levels in
      real-time, allowing pharmacy and materials management departments to avoid
      shortages in care areas, improving patient care. Furthermore, by comparing
      actual utilization rates with standing inventory levels, business managers
      can optimize inventory levels across the entire enterprise. By controlling
      and monitoring access to pharmaceuticals and supplies, our systems also
      discourage stockpiling or theft. We estimate that our supply systems can
      reduce our customers' annual supply consumption costs by approximately 15%
      to 20% and reduce their required inventory levels by approximately 25% to
      30%.
 
                                       31

<PAGE>
    - IMPROVE OPERATING EFFICIENCY.  Our pharmacy and supply systems accurately
      capture data by patient, physician, location and billing code. These
      systems interface with our customers' existing clinical pharmacy,
      financial and materials management systems to automate such processes as
      medication reporting, patient billing and inventory replenishment. This
      eliminates manual processes and provides our customers with immediate
      access to data gathered by our systems to facilitate real-time operations
      management. Use of our pharmacy and supply systems also reduces process
      costs and increases labor productivity, enabling caregivers to devote more
      time to delivering patient care and allowing support personnel to provide
      additional services with fewer people. We estimate that our supply systems
      can reduce our customers' personnel needs by 1.5 full-time equivalent
      employees for every 100 occupied hospital beds.
 
    - LEVERAGE INVESTMENTS IN EXISTING INFORMATION SYSTEMS.  Because our
      automation solutions are designed to integrate with healthcare facilities'
      existing clinical pharmacy, financial and materials management systems, we
      can preserve their existing investments in these systems and enhance those
      systems' functionality. We have developed over 1,500 live, proprietary
      software interfaces that integrate our automation solutions with
      healthcare facilities' existing information systems. We believe our
      interface capabilities make our solutions particularly useful to large
      enterprises, such as integrated delivery networks, that often use
      multiple, disparate information systems among their facilities.
 
    - SIMPLIFY ORDERING PROCESSES.  Our Internet-based procurement application,
      OmniBuyer, simplifies the predominantly manual, paper-based procurement
      processes that currently exist in most healthcare facilities. By
      automating the purchasing process, OmniBuyer reduces administrative work
      and processing costs, increases contract compliance and improves order
      accuracy and information management. Used in conjunction with our pharmacy
      and supply systems, our customers are able to benefit from a fully
      electronic supply chain, from selected suppliers to the point of use. We
      estimate that OmniBuyer reduces the cost of issuing a purchase order from
      an average of $75 to $125 per purchase order to $15 to $30.
 
    - MONITOR UTILIZATION TRENDS.  Our Internet-enabled decision support tool,
      DecisionCenter, tracks pharmaceutical and supply utilization by physician,
      patient, procedure, item and diagnosis code. DecisionCenter provides
      healthcare facilities with the ability to identify trends in drug
      utilization and diversion, improve regulatory compliance and reduce costs
      by monitoring usage patterns and optimizing product management.
      DecisionCenter also provides secured trend analysis, decision support and
      regulatory compliance reports based on data gathered from our pharmacy and
      supply systems and other information systems within the healthcare
      facility.
 
STRATEGY
 
Our goal is to become the leading provider of clinical infrastructure and
workflow automation solutions for the healthcare industry. We intend to achieve
this goal through the following strategies:
 
    - CONTINUE TO LEVERAGE AND EXTEND OUR SOLUTIONS.  We intend to continue to
      develop features and functionality for our automation solutions that
      address the patient safety and cost-containment pressures confronting
      healthcare facilities. In addition, we intend to continue to add software,
      hardware and Internet-based solutions that complement and extend our
      automation solutions. For example, in 1999, we introduced OmniBuyer, which
      automates healthcare facilities' purchasing processes, to provide a
      complementary service to our pharmacy and supply systems.
 
    - COLLABORATE WITH LEADING HEALTHCARE PROVIDERS.  We work closely with
      leading healthcare institutions, such as Massachusetts General Hospital,
      New York University Hospitals Center and the Cleveland Clinic, in the
      definition, development and deployment of our products and services. These
      institutions demand innovative and cost-effective products and services
      that address their clinical infrastructure and workflow automation needs.
      They also require that our
 
                                       32

<PAGE>
      products and services be comprehensive in scope and capable of supporting
      the operations of an entire healthcare enterprise. Through our
      collaborations with leading healthcare institutions, we seek to establish
      our automation solutions as industry standards for clinical infrastructure
      and workflow automation.
 
    - FURTHER PENETRATE OUR INSTALLED CUSTOMER BASE.  We have a sizable
      installed base of approximately 18,000 pharmacy and supply systems in over
      1,100 healthcare facilities. Most of our customers have purchased only a
      subset of our products and services, or have not yet implemented our
      products and services throughout their facilities. As a result, we believe
      a significant opportunity exists to expand sales to our existing
      customers. We intend to leverage our close customer relationships and the
      measurable benefits of our products and services to capitalize on this
      opportunity.
 
    - DEVELOP SOLUTIONS THAT ENHANCE OUR CUSTOMERS' EXISTING SYSTEMS.  We expect
      healthcare facilities to continue to demand our clinical infrastructure
      and workflow automation solutions as a means to preserve, leverage and
      upgrade their existing information systems. We will continue to deliver
      Internet-based and fully integrated automation solutions that are
      cost-effective and enhance our customers' existing information systems. We
      will also continue to utilize our dedicated interface team, proprietary
      hardware and software interface technologies and over 1,500 live
      interfaces to fully integrate our automation solutions with our customers'
      existing information systems.
 
    - DEVELOP STRATEGIC RELATIONSHIPS.  We expect to continue to enter into
      strategic relationships that enhance our product offerings, broaden our
      automation solutions and increase our sales opportunities. We expect these
      relationships to increase the clinical efficacy of our automation
      solutions and open new markets for them. We currently have a relationship
      with Gold Standard Multimedia whose Clinical Pharmacology database
      connects to our pharmacy systems through the Internet, providing important
      drug allergy and drug interaction information to clinicians as they remove
      medications from our pharmacy systems. We also have a strategic
      relationship with Becton, Dickinson and Company that allows us to
      co-market their bedside Rx System for prevention of medication errors to
      our installed customer base. The Becton Dickinson system is intended to be
      fully integrated with our pharmacy systems to promote maximum safety in
      the delivery of medications to the patient while automating and enhancing
      workflow.
 
OMNICELL PRODUCTS AND SERVICES
 
Our automation solutions include pharmacy and supply systems, an Internet-based
procurement application and decision support capabilities. Our pharmacy and
supply systems consist of modular, secured and computerized cabinets and related
software technology that manage and dispense pharmaceuticals and medical
supplies. OmniBuyer automates the healthcare facility's requisition process, and
DecisionCenter provides trend analysis and decision support based on data
gathered by our pharmacy and supply systems.
 
PHARMACY SYSTEMS
 
We offer two lines of pharmacy systems, Omnicell and Sure-Med. Our Omnicell
pharmacy systems are highly configurable and are typically installed with
high-resolution color touch screens. Our color touch screens provide users with
a Windows-based graphical interface that is suited for displaying a patient's
medical profile and Internet-based clinical information. In addition, our
Omnicell pharmacy systems have dispensing drawers that support multiple levels
of security by utilizing single-dose lids, locking lids, sensing lids and
patented guiding lights. The systems are configured to support clinical workflow
in all areas of the hospital including the operating rooms, emergency rooms,
intensive care units and medical/ surgical floors.
 
                                       33

<PAGE>
We acquired the Sure-Med pharmacy system from Baxter Healthcare in 1999. Our
Sure-Med systems incorporate a variety of storage compartments and software that
is compatible with all of our automation solutions. Our Sure-Med systems offer a
wide range of configuration and dispensing technologies, including unit-dose
dispensers and multiple drawer sizes. The unit-dose module dispenses only the
requested medication doses and is best suited for medications where regulatory
guidelines mandate a highly controlled environment. Clinicians prefer this
technology in high-security situations because it automates much of the
logistical and documentation burden and responsibility associated with
dispensing controlled medications. In late 2000, we extended our color touch
screens and associated software available on our Omnicell pharmacy system to the
Sure-Med pharmacy system. This will enable both systems to function on a common
platform, allowing customers to add our other products to their Sure-Med
pharmacy systems. We expect broad adoption of this new technology across our
Sure-Med installed base.
 
SUPPLY SYSTEMS
 
Our primary supply systems are comprised of one, two or three cabinets. Each
cabinet is approximately two feet wide, six feet high and two feet deep with
capacity for up to 120 stock keeping units. Each supply system includes a
processor and user interface. Auxiliary cabinets can be added to the system to
provide additional storage capacity. Various shelf, drawer and rack modules
facilitate a wide array of storage configurations.
 
Our supply systems incorporate locked transparent doors that restrict access to
the supplies contained in our systems. Users enter their identification number
on a console and select the appropriate patient name. Specific doors then open
based on the security level of the user. Using our patented "See & Touch"
technology, the user is able to record supply utilization by pushing a dedicated
reorder button on the shelf in front of the selected item.
 
COMBINATION SYSTEMS
 
Our combination systems allow healthcare organizations to store pharmaceuticals
and medical supplies in a single system. The architecture of our combination
system enables each operating department to manage its products independently of
other operating departments, restricting clinician and technician access to only
appropriate pharmaceuticals and medical supplies and allowing the tracking of
transaction data, inventory levels, expenses and patient treatment costs through
a single database. By utilizing our combination systems, healthcare facilities
are able to handle pharmaceuticals and medical supplies with greater flexibility
and efficiency.
 
OMNICENTER
 
OmniCenter is a computerized central server that processes transaction data to
and from our pharmacy and supply systems, recording each transaction by user,
patient, item quantity, cost, date and time. OmniCenter enables the pharmacy and
materials management departments to run reports automatically or on demand,
indicating when to restock the systems and when to reorder pharmaceuticals and
supplies. OmniCenter also permits the user to generate a wide range of standard
and customized reports. As a diagnostic service, we are able to remotely access
an installed OmniCenter from our technical support center to monitor the status
of the server and all installed pharmacy and supply systems.
 
OMNIBUYER
 
OmniBuyer is a secure Internet-based procurement application that automates and
integrates a healthcare facility's requisition and approval processes. The
application incorporates buyer-specific business rules, such as spending limits,
negotiated pricing, approval routing and customized access
 
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<PAGE>
profiles. In addition, OmniBuyer is integrated with the healthcare facility's
existing information systems, further streamlining the purchasing process.
OmniBuyer is based on Commerce One's BuySite technology that we have customized
to meet the complex needs of the healthcare industry.
 
OmniBuyer provides a single online point of entry to meet the procurement needs
of buyers at healthcare facilities. We typically sell OmniBuyer on an
application service provider basis. Using OmniBuyer, our customers determine the
specific suppliers, including manufacturers, distributors, marketplaces and
exchanges, to which their buyers will have access.
 
DECISIONCENTER
 
DecisionCenter is an Internet-enabled decision support product that provides
secure trend analysis, decision support and regulatory compliance reports based
on data from our pharmacy and supply systems. It consolidates information from
one or more OmniCenters into one database. The data are stored in a raw format
as well as aggregated for rapid response to queries. We have developed the
"My-Omni" Web page that allows users to configure frequently requested
information from a short menu. In addition, we offer sophisticated graphical
tools that allow users to make detailed queries across all data fields. These
systems are typically interfaced with the healthcare facility's medical records
system in order to augment the database with correctly associated diagnosis
codes. Data can be viewed by authorized users and personnel at any time,
allowing for easy and comprehensive analysis to improve decision making.
 
SERVICES
 
We provide three types of services in support of our automation solutions:
(i) post-sales installation services at customer facilities, provided by our
field service organization; (ii) integration services in which our interface
development team interfaces our solutions with our customers' existing clinical
pharmacy, financial, and materials management systems; and
(iii) post-installation technical support. We generate revenue from service
contracts for post-installation technical support, which provides our customers
with phone support, on-site service, parts, and access to software upgrades.
On-site service is provided by a combination of our field service operations
team, technical support group and 150 field service representatives from Dade
Behring Inc., a third-party service company.
 
MEDCENTERCITY
 
We own and operate MedCenterCity, a Web site for healthcare professionals, as a
service to the healthcare community. The site includes articles on relevant
issues, including the cost of healthcare, reducing medical errors and the
Healthcare Information Portability and Accountability Act of 1996.
 
CUSTOMERS
 
Our target customers for our automation solutions are healthcare facilities,
including hospitals and alternate care facilities. As of February 28, 2001, over
1,100 hospitals and alternate care facilities had
 
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<PAGE>
purchased or leased our pharmacy and supply systems. The following entities are
representative of our largest hospital customers based on pharmacy and supply
systems purchased or leased:
 

<TABLE>
<S>                                           <C>
- Bellevue Hospital Center                    New York, NY
- Children's Medical Center of Dallas         Dallas, TX
- Cleveland Clinic                            Cleveland, OH
- Jackson Memorial Hospital                   Miami, FL
- Massachusetts General Hospital              Boston, MA
- Madigan Army Medical Center                 Tacoma, WA
- New York University Hospitals Center        New York, NY
- Northwestern Memorial Hospital              Chicago, IL
- Raritan Bay Medical Center                  Perth Amboy, NJ
- Rush-Presbyterian-St. Luke's Medical
Center                                        Chicago, IL
- University of Utah Hospitals and Clinics    Salt Lake City, UT
- University of Texas Medical Branch          Galveston, TX
- Walter Reed Army Medical Center             Washington, D.C.
</TABLE>

 
Rush-Presbyterian, Madigan Army Medical Center and Raritan Bay Medical Center
are among the 15 customers that have purchased supplies through OmniBuyer.
 
RUSH-PRESBYTERIAN CASE STUDY
 
Rush-Presbyterian-St. Luke's Medical Center in Chicago, Illinois is an example
of a healthcare facility progressively adopting our automation solutions to
derive benefits across the enterprise. In December 1993, Rush-Presbyterian
installed our supply systems in an area of its facility called the Atrium. A
two-year retrospective study was performed to assess the long-term impact of our
supply systems on Rush-Presbyterian's inventory management processes. The study
found that total supply consumption in the Atrium for the first year, 1994,
declined by almost $150,000 or 20.3% versus the baseline year. In 1995, total
supply consumption in the Atrium dropped an additional $30,000 below the already
reduced first-year level, to 24.3% below the baseline year. Rush-Presbyterian
has expanded its use of our supply systems to other areas of the facility,
including the Cardiovascular Catheterization Unit (CVCU).
 
In November 1999, Rush-Presbyterian implemented OmniBuyer in the CVCU. In the
CVCU, Rush-Presbyterian has automated the procurement process from the point of
use to the supplier. The automation process begins when an item such as a
catheter is removed from one of our supply systems. The user then pushes a
dedicated reorder button for each item removed. The usage data generated by
these transactions are consolidated by our OmniCenter, which interfaces with
OmniBuyer. When a reorder point is reached, the manager of the CVCU receives an
automatic e-mail message, notifying him to log on to OmniBuyer, where he views a
requisition detailing the products to be reordered. The manager is then able to
edit and approve the requisition. Once approved, OmniBuyer transmits the
requisition to the supplier, accessing current pricing information from the
supplier and sends the order to the Rush-Presbyterian enterprise resource
planning system in order to generate an accurate purchase order. After the
requisition has been received and processed by the supplier, an e-mail message
is sent back to the requisitioner to verify that the order has been received and
processed. The e-mail message identifies backorder status, which is helpful if a
different supplier needs to be contacted to obtain a required product. The
e-mail message also identifies discrepancies in supplier pricing by comparing
automatically purchased goods to contract prices. This feature has already saved
Rush-Presbyterian thousands of dollars in inadvertent supplier overcharges.
 
                                       36

<PAGE>
STRATEGIC RELATIONSHIPS
 
We establish and maintain relationships with companies whose products, services,
technologies and/or market presence enhance our ability to deliver value to our
customers and who open up additional sales opportunities for our automation
solutions. Among the most significant relationships are the following:
 
BECTON, DICKINSON AND COMPANY
 
Becton Dickinson is a manufacturer of medical supplies, devices and diagnostic
systems, including the BD Rx System. The BD Rx System allows nurses to perform a
final, bedside safety check by positively identifying the correct patient,
medication, dosage, time and method of delivery before administering the
medication. The system utilizes a sophisticated hand-held computing platform and
bar code scanner that a nurse can transport from patient to patient. In June
2000, we agreed to co-market the BD Rx System to our installed base of pharmacy
system customers.
 
GOLD STANDARD MULTIMEDIA (CLINICAL PHARMACOLOGY)
 
Gold Standard Multimedia is a provider of multimedia programs for the healthcare
market. Gold Standard Multimedia's drug information application, Clinical
Pharmacology, was named eHealthcareWorld's 1999 Gold Award winner for best
online publication for professionals. We have an agreement with Gold Standard
Multimedia to make the Clinical Pharmacology database available to our customers
through the Web browser loaded onto all of our color touch screens. Access to
the database is integrated with our pharmacy systems so that when a nurse
removes a drug for a patient, commands are processed through the browser that
make clinical information about that drug available to the nurse on our color
touch screen. The nurse can view allergy and drug interaction information,
locate specific details and view an image of the drug. We believe that access to
these types of information from our pharmacy systems can prevent medication
errors. Clinical Pharmacology also provides drug information that nurses can
print for patients prior to discharge to reinforce patient education.
 
U.S. PHARMACOPEIA
 
U.S. Pharmacopeia is a non-profit organization that establishes standards to
ensure the quality of medicines. We have a co-marketing agreement with
U.S. Pharmacopeia that makes their MedMARx medication error reporting and
analysis software available on our pharmacy systems. The MedMARx software
provides a standardized framework for medication error reporting. From our color
touch screen, clinicians can record medication errors, run standard and
customized reports and view the results in chart and graph form. These reports
help clinicians follow trends and pinpoint problem areas. U.S. Pharmacopeia also
maintains a national medication errors database that allows healthcare
facilities to anonymously compare themselves to similar institutions.
 
COMMERCE ONE, INC.
 
Commerce One, Inc. is a provider of e-commerce solutions that dynamically link
buying and supplying organizations to form real-time trading communities. In
August 1999, we entered into an agreement with Commerce One and paid a license
fee pursuant to which we received a perpetual license to Commerce One's Hosted
BuySite software for use in developing our OmniBuyer application. The agreement
also provides for program management services and ongoing maintenance and
support of the software for additional fees. The agreement continues perpetually
unless otherwise terminated by either party pursuant to the termination
provisions of the agreement. In addition, our strategic relationship with
Commerce One allows for co-marketing and co-development efforts and enables us
to
 
                                       37

<PAGE>
utilize their e-commerce technology platform and access their Global Trading
Web. In March 2000, Commerce One made an equity investment in our company.
 
RESEARCH AND DEVELOPMENT
 
We commit significant resources to developing new products and technologies that
bring value to our customers. We believe that our research and development focus
and quality team are key competitive advantages in the industry. As of
February 28, 2001, we have 59 employees in research and development,
approximately 17% of our entire workforce. Research and development expenses
were $6.0 million, $8.7 million and $11.3 million in the years ended
December 31, 1998, 1999 and 2000, respectively, representing 12.4%, 16.4% and
17.6% of total revenues in those years.
 
Our architecture and sophisticated product development process allow for rapid
development and testing times. The software architecture for our pharmacy and
supply systems is based on database products and development tools centered
around the Microsoft Windows NT platform and the Microsoft Internet Information
Server. This software is installed at the customer site. We develop application
software that is generally applicable to all customers, while retaining broad
customization functionality. We maintain a single release applicable to both our
pharmacy and supply systems, with each new release containing more configurable
options as new features are added, while retaining previous functionality for
backward compatibility. Interfacing with our customer's existing information
systems is done according to the Health Level Seven (HL7) standards or, for
non-compliant systems, is done utilizing our custom interface software.
Interface software is kept separate from the main software release.
Communication between the OmniCenter server and the pharmacy and supply systems
and interface software is accomplished through an application programming
interface. Each new release of server software maintains backward compatibility
with this application programming interface, so that previous versions of
interfaces and pharmacy and supply systems continue to operate when the
OmniCenter server software is upgraded. Our products currently do not require
approvals beyond standard Underwriters Laboratories or Canadian Safety
Association equivalent certification.
 
A vital part of our automation solutions business and among our core
competencies is a dedicated hardware group. While software occupies the majority
of our development resources, the knowledge and expertise of our hardware group
is one of the significant barriers to entry for potential competitors. Since our
pharmacy and supply systems handle physical product, a considerable amount of
skill is required in designing mechanisms that will automatically dispense a
variety of sizes of pharmaceuticals and medical supplies. Our mechanical and
electronic designers use automated design tools to allow full three-dimensional
simulation down to individual piece part drawings. In many cases our design
documentation is transmitted to suppliers electronically.
 
For our OmniBuyer application, our strategic relationship with Commerce One
allows us to incorporate and extend Commerce One's technology platforms,
applications, source code and documentation into healthcare. Their tools allow
us to modify their BuySite software to produce our branded OmniBuyer
application, minimizing the effort to port specific software changes to the
latest Commerce One release.
 
TECHNOLOGY
 
Much of our architecture is based on industry standards such as programming
languages like C++, Visual Basic and Java, standard HL7 healthcare interfaces,
the Microsoft Windows NT operating systems, Intel microprocessors and standard
IEEE 802.11b wireless protocols. Our product development teams employ
object-oriented analysis and design principles to guide the development of an
object-oriented system of software code. Our methodology allows us to utilize
the capabilities of object-oriented programming languages like C++ and Java to
build reusable components and designs. This
 
                                       38

<PAGE>
methodology also helps reduce the risks inherent in developing complex systems
and helps us design our solutions to meet the needs of our customers.
 
Scalability is a key benefit of our product offering and an area of continuous
focus in our research and development activities. Our pharmacy and supply
systems deploy current industry standard Microsoft Windows NT 4.0 Server
operating software and Pentium-class Intel microprocessors. The OmniCenter
server is designed to support our systems, fully deployed, at the largest
healthcare facility. Historically, we routinely upgrade our application software
to a major new release once a year. We also offer our customers server hardware
upgrades to take advantage of improvements in computer performance. Current
server hardware is available with single or dual processor platforms with, or
without, redundant arrays of independent disks and power supplies, depending on
the size of the application. In addition to developing new application features,
our software development group makes continuous improvements to our proprietary
applications and communications software to optimize the speed and performance
of our systems. We maintain a separate software quality assurance department
that provides testing of new features and regression testing of the existing
features before we release software for test sites. At the successful completion
of the testing period, the software is released for general availability.
 
In the Internet-based procurement area, Commerce One's solution utilizes XML
software technology platform servers to generate and securely transmit XML
documents over the Internet. Commerce One has also created a common business
library designed to enable a common language-based framework for uniting
disparate business document types. While we believe that XML software technology
is emerging as an industry standard for business-to-business electronic
commerce, we have also developed translation technology that converts XML
documents into other document formats. This translation technology allows us to
deliver purchase orders to suppliers in a wide variety of document formats,
including electronic data interchange, Open Buying on the Internet, ASCII flat
file, e-mail, Microsoft Excel and facsimile.
 
Our Internet-based products use 128-bit encryption, HTTPS-SSL and
password-protected user access. Our servers are located behind corporate
firewalls and access is multiple password-protected. We recognize our
obligations to safeguard patient information and other customers' proprietary or
confidential information to which we may have access through the use of our
automation systems and OmniBuyer. We have implemented a Privacy and Use of
Information Policy and strictly adhere to established privacy principles, use of
customer information guidelines and federal and state statutes and regulations
regarding privacy and confidentiality, including those measures and practices
required under the Health Insurance Portability and Accountability Act of 1996.
 
SALES, MARKETING AND CUSTOMER SUPPORT
 
We market and sell our products and services to a variety of healthcare
organizations, including hospitals and alternate care facilities, targeting
hospitals with over 100 beds and alternate care organizations with multiple
facilities. In the United States and Canada, we have a direct sales force
organized into six regions. We sell through distributors in Europe, the Middle
East, Asia and Australia. Each of the members of our direct sales force sells
our pharmacy and supply systems, OmniBuyer and DecisionCenter. Our sales
representatives have, on average, over eight years of sales experience in the
healthcare industry. A regional vice president coordinates both the sales and
field service operations activities in each region.
 
Our marketing group is responsible for product marketing, marketing
communications, Web site development, public relations, sales support and
training. It generates leads through a variety of means, including advertising,
direct marketing and participation in trade shows and conferences covering such
areas as pharmacy, nursing, anesthesiology, operating room management, hospital
administration, materials management, electronic commerce and supply chain
management.
 
                                       39

<PAGE>
The sales cycle for our automation systems is long and can take in excess of
12 months. This is due in part to the cost of our systems and the number of
people within a healthcare facility involved in the purchasing decision. To
initiate the selling process, the sales representative generally targets the
director of pharmacy, the director of materials management and/or other decision
makers and is responsible for educating each group within the healthcare
facility about the benefits of automation. To assist hospitals in the
acquisition of our systems, we offer multi-year, non-cancelable leases that
reduce up-front acquisition costs. Typically, we sell our customers' lease
agreements to a third-party leasing company. We have contracts with several
group purchasing organizations (GPOs) that enable us to sell our automation
systems to GPO-member healthcare facilities without going through a lengthy
request for proposal and bidding process. These GPO contracts are typically for
multiple years with options to renew or extend for up to two years but can be
terminated by either party at any time. Our current GPO contracts include
Premier, Inc., Novation, LLC, Consorta Catholic Resources Partners, Tenet
Healthcare Corporation and the Department of Veterans Affairs.
 
Our field service operations representatives support our sales force by
providing operational and clinical expertise prior to the close of a sale and
installing our automation systems post-sale. This group assists the customer
with the technical implementation of our automation systems, including
configuring our systems to address the specific needs of each individual
customer. After the systems are installed, on-site support is provided by a
combination of our field service operations team, technical support group and a
third-party service company.
 
We offer technical support through our technical support center in Waukegan,
Illinois. The support center is staffed 24 hours a day, 365 days a year. We use
the Siebel Systems software package, an industry standard for call centers, to
field calls from customers. We have found that two-thirds of all service issues
can be addressed either over the phone or by our support center personnel
utilizing their on-hand remote diagnostics tools. In addition, we have developed
remote dial-in software that monitors customer conditions on a daily basis.
 
We leverage our sales and field service organizations, along with our technical
support center, to sell, implement and support OmniBuyer. In addition, we have
added specialists who work solely with healthcare facilities to implement
OmniBuyer. The implementation process is done in phases. We work with each
healthcare facility to determine its purchasing and approval flows. We also
interface OmniBuyer to all relevant information systems, assist with
connectivity to suppliers, marketplaces and exchanges and provide training on
the application.
 
MANUFACTURING OF PHARMACY AND SUPPLY SYSTEMS
 
Our pharmacy and supply systems manufacturing strategy is to produce custom
configured systems with rapid turnaround in a high-quality and cost-effective
manner. We currently conduct our manufacturing operation in a 23,000 square foot
facility in Palo Alto, California operating on one shift. We operate on a
continuous flow, just-in-time basis to perform final assembly, configuration and
system testing of all products. Our customer service personnel work closely with
the end user to determine specific customer requirements for each installation.
The detailed customer requirements are transmitted electronically to our
manufacturing facility where they are used to custom configure each unit. Our
operating software is installed as a part of the assembly process. Once
assembled, every unit undergoes mechanical and systems testing prior to
shipping.
 
Our production activities consist primarily of final assembly of mechanical
components and electronic sub-systems outsourced to key suppliers. While many
components of our systems are standardized and available from multiple sources,
certain components or subsystems are fabricated according to our specifications.
We endeavor to obtain multiple sources of supplies for certain components. We
believe we could obtain alternative sources of supplies within two to four
months if our current suppliers were unable to provide us with adequate
quantities of such components.
 
                                       40

<PAGE>
Our products are designed with a high degree of modularity that facilitates
manufacturing, assembly and configuration and enables rapid deployment of new
products and product enhancements. We have automated much of the software
quality assurance process and have streamlined key steps in the mechanical
prototyping process in order to minimize the time from design prototype to
volume production. We work closely with several key fabricators and subassembly
manufacturers on new products and utilize lower-cost manufacturers whenever
possible while maintaining product quality and availability. We are continuously
re-engineering our products to reduce manufacturing costs while improving
product reliability and serviceability.
 
Our quality assurance team inspects and creates an electronic record for every
product before it is shipped using personal digital assistants. This information
is used to monitor workmanship by recording the number of defects per thousand
units. Each manufacturing employee is part of an incentive program tied to
reducing defects per thousand units. Quality issues are gathered through weekly
field updates and direct calls from our sales and customer support groups. These
issues are addressed in weekly reliability meetings, which bring together our
engineering, manufacturing and quality assurance teams.
 
COMPETITION
 
The clinical infrastructure and workflow automation market is intensely
competitive and characterized by evolving technology and industry standards,
frequent new product introductions and dynamic customer requirements. Many
healthcare facilities still use and may continue to use highly manual approaches
that do not utilize automated methods of distribution, inventory tracking or
procurement. As a result, we must continuously educate existing and prospective
customers regarding the advantages of our products.
 
We expect continued and increased competition from current and future
competitors, many of which have greater financial, technical, marketing and
other resources. Our current direct competitors in the pharmacy and supply
systems market include Pyxis Corporation (a division of Cardinal Health) and
Automated Healthcare (a division of McKessonHBOC).
 
We believe that companies in the clinical infrastructure and workflow automation
market compete based on:
 
    - breadth and depth of product offerings;
 
    - ease of use and efficiency;
 
    - ability to incorporate the customer's requisition and approval process;
 
    - ability to integrate their services with the customer's existing systems
      and software;
 
    - quality and reliability of product offerings;
 
    - customer service; and
 
    - price.
 
We believe our products and services compare favorably with those offered by our
competitors.
 
GOVERNMENT REGULATION
 
The manufacture and sale of our current products are not regulated by the FDA.
There can be no assurance, however, that these products, or future products, if
any, will not be regulated in the future. A requirement for FDA approval could
harm our business, results of operations and financial condition. The practice
of pharmacy is governed by individual state boards of pharmacy that issue rules
for pharmacy licensure in their respective jurisdictions. State boards of
pharmacy do not license or
 
                                       41

<PAGE>
approve our distribution systems. However, pharmacies using our equipment are
subject to state board approval. Similarly, hospitals must be accredited by
JCAHO in order to be eligible for Medicaid and Medicare funds. JCAHO does not
approve or accredit distribution systems.
 
Our online services may be subject to a number of laws and regulations that may
be adopted or interpreted in the United States and abroad with particular
applicability to the Internet. The laws governing Internet transactions remain
largely unsettled, even in areas where there has been some legislative action,
such as the federal Internet Tax Freedom Act. It is possible that U.S. and
foreign governments will enact legislation that may be applicable to us in areas
including content, product distribution, network security, encryption, the use
of measures for data and privacy protection, electronic authentication, access
charges and re-transmission activities. The adoption or modification of laws or
regulations relating to the Internet or its related technologies could have a
material adverse effect on our OmniBuyer application and also adversely affect
our business by increasing our costs and administrative burdens. It may take
years to determine whether and how existing laws such as those governing
intellectual property, privacy, libel, consumer protection and taxation apply to
the Internet. We believe that our Privacy and Use of Information Policy to be
posted on our Web site addresses the concerns raised by the recent privacy
initiative of the Federal Trade Commission. However, we cannot assure you that
this initiative will not negatively affect our business. Compliance with any
newly adopted laws may prove difficult for us and could harm our business.
 
PROPRIETARY RIGHTS AND LICENSING
 
Our success depends in part upon a combination of copyright and trademark laws,
trade secrets, confidentiality procedures and contractual provisions to protect
our proprietary rights. We pursue patent protection in the United States and
foreign jurisdictions for technology that we believe to be proprietary and that
offers a potential competitive advantage for our products. We currently own ten
U.S. patents that will expire between 2010 and 2017. In addition, we currently
have one U.S. patent allowed and awaiting issue and have filed five U.S. patent
applications. The issued patents relate to our "See & Touch" methodology used in
our pharmacy and supply systems, the use of guiding lights in the open matrix
pharmacy drawers, the use of locking and sensing lids with pharmacy drawers and
the methods of restocking these drawers. The above referenced patents also apply
to our unit-dose mechanism and methods, the single-dose dispensing mechanism and
the methods for restocking the single-dose drawers using exchange liners. There
are other issued patents and applications in process in Australia, Japan, Hong
Kong, Canada and European countries related to issued and pending applications
in the United States. We are not aware that any of our products infringes the
proprietary rights of third parties.
 
All of our operating system software is copyrighted and subject to the
protection of applicable copyright laws. We have also obtained registration of
our Omnicell logo, Omnicell, OmniCenter, OmniSupplier, OmniRx and Sure-Med
trademarks through the United States Patent and Trademark Office. We are in the
process of registering other trademarks, in the United States and
internationally. We seek to protect and enforce our rights in our patents,
copyrights, service marks, trademarks, trade dress and trade secrets through a
combination of laws and contractual restrictions, such as confidentiality and
licensing agreements.
 
FACILITIES
 
We lease approximately 113,000 square feet of office, development and
manufacturing space in Palo Alto, California and Waukegan, Illinois. Our
principal administrative, marketing and research and development facilities are
located in approximately 34,000 square feet of leased office space in Palo Alto,
California under leases expiring in January 2002 and June 2004. Our principal
manufacturing facility is located in approximately 23,000 square feet of leased
space in Palo Alto, California under a lease expiring in June 2003, with an
option to renew for an additional five years. We also maintain an
 
                                       42

<PAGE>
administrative, marketing, development, technical support and training facility
located in approximately 38,000 square feet of leased office space in Waukegan,
Illinois under a lease expiring in June 2006, with an option to renew for an
additional five years.
 
EMPLOYEES
 
As of February 28, 2001, we had a total of 348 employees, including 59 in
research and development, 62 in sales, 23 in marketing, 118 in customer support,
40 in administration and 46 in manufacturing. We also employ independent
contractors and temporary personnel to support our development, marketing,
customer support, field service and administration organizations. None of our
employees is represented by a collective bargaining agreement, nor have we
experienced any work stoppage. We consider our relations with our employees to
be good.
 
LEGAL PROCEEDINGS
 
We are not a party to any material legal proceedings.
 
                                       43

<PAGE>

                                   MANAGEMENT
 
DIRECTORS AND OFFICERS
 
The following table sets forth certain information as of February 28, 2001,
about our executive officers, other officers and members of our board of
directors:
 

<TABLE>
<CAPTION>
NAME                                       AGE                            POSITION
----                                     --------   -----------------------------------------------------
<S>                                      <C>        <C>
Sheldon D. Asher.......................        47   President, Chief Executive Officer and Director
Randall A. Lipps.......................        43   Founder, Chairman of the Board and Director
S. Michael Hanna.......................        49   Vice President of Sales and Field Operations
John D. Higham.........................        58   Vice President of Engineering and Chief Technical
                                                    Officer
Robert Y. Newell, IV...................        52   Vice President of Finance and Chief Financial Officer
Jeffrey L. Arbuckle....................        44   Vice President of Business Development
Herbert J. Bellucci....................        51   Vice President of Manufacturing
Joseph E. Coyne........................        38   Vice President of Customer Service
William R. Dimmer......................        57   Vice President of Human Resources
Kenneth E. Perez.......................        40   Vice President of Marketing
Gary E. Wright.........................        47   Vice President of Supplier Relations and
                                                    International
Gordon V. Clemons(1)...................        57   Director
Frederick J. Dotzler(2)................        55   Director
Christopher J. Dunn, M.D.(2)...........        49   Director
Randall A. Hack(1).....................        53   Director
Benjamin A. Horowitz...................        34   Director
Kevin L. Roberg........................        49   Director
John D. Stobo, Jr.(1)..................        35   Director
William H. Younger, Jr.(1)(2)..........        51   Director
</TABLE>

 
------------------------
 
(1)  Member of the Audit Committee
 
(2)  Member of the Compensation Committee
 
SHELDON D. ASHER has served as President and Chief Executive Officer and a
Director of Omnicell since December 1993. From May 1991 to August 1993, Mr.
Asher served as President and Chief Executive Officer of Option Care, Inc., a
home infusion therapy company. Mr. Asher received a B.S. in finance from the
University of Illinois.
 
RANDALL A. LIPPS has served as Chairman of the Board and a Director of Omnicell
since founding Omnicell in September 1992. From 1989 to 1992, Mr. Lipps served
as the President of Moxie Technologies, Inc., a direct marketing firm
specializing in travel and long-distance communications sales. Mr. Lipps
received both a B.S. in economics and a B.B.A. from Southern Methodist
University.
 
S. MICHAEL HANNA has served as Vice President of Sales and Field Operations of
Omnicell since July 1998. From July 1996 to July 1998, Mr. Hanna served as a
Regional Vice President of Omnicell. From 1981 to July 1996, Mr. Hanna was
employed by Air Shields, Inc., a medical equipment manufacturer, in a variety of
sales positions, most recently as Director of North American Sales. Mr. Hanna
received a B.S. in business administration from Shepard College.
 
JOHN D. HIGHAM has served as Vice President of Engineering and Chief Technical
Officer of Omnicell since June 1993. From 1989 to 1993, Mr. Higham served as
Vice President of Engineering of Octel Communications, Inc., a supplier of
voicemail systems. Mr. Higham received engineering and industrial management
degrees from Cambridge University, England, and a master's degree in electrical
engineering from Columbia University.
 
                                       44

<PAGE>
ROBERT Y. NEWELL, IV has served as Vice President of Finance and Chief Financial
Officer of Omnicell since January 2000. From October 1997 to January 2000, Mr.
Newell was a partner in the Beta Group, a business development firm. From August
1992 to August 1997, he was Vice President and Chief Financial Officer of
Cardiometrics, Inc., a medical device company. Mr. Newell received a B.A. in
mathematics from the College of William & Mary and an M.B.A. from Harvard
Business School.
 
JEFFREY L. ARBUCKLE has served as Vice President of Business Development of
Omnicell since June 1999. From July 1997 to June 1999, Mr. Arbuckle served as
Vice President of Marketing of Omnicell. From February 1994 to June 1997, Mr.
Arbuckle served as a Regional Vice President of Omnicell. From 1991 to 1994, Mr.
Arbuckle served as Regional Manager of Siemens Infusion, a marketer of drug
delivery systems. Mr. Arbuckle received a B.A. from Indiana University.
 
HERBERT J. BELLUCCI has served as Vice President of Manufacturing of Omnicell
since April 1994. From August 1993 to March 1994, Mr. Bellucci served as Vice
President of Operations of VidaMed, Inc., a medical device company. Mr. Bellucci
received a B.S. in engineering from Brown University and an M.B.A. from the
Stanford Graduate School of Business.
 
JOSEPH E. COYNE has served as Vice President of Customer Service of Omnicell
since August 1997. From May 1994 to August 1997, Mr. Coyne served as Director of
Interface Development of Omnicell. From 1984 to May 1994, Mr. Coyne was employed
by HBO & Company, a healthcare information systems company, in various technical
capacities, including Technical Manager and Software Interface Team Manager. Mr.
Coyne received a B.S. in chemical engineering from Stanford University and an
M.B.A. from the Anderson Graduate School of Management at the University of
California, Los Angeles.
 
WILLIAM R. DIMMER has served as Vice President of Human Resources of Omnicell
since March 2000. From July 1998 to March 2000, Mr. Dimmer served as Vice
President of Human Resources and Administrative Services for Collagen
Aesthetics, Inc., a healthcare dermatology products company. From June 1994 to
July 1998, Mr. Dimmer was a Principal and Senior Consultant for Pragma,
International, an international management and consulting firm. Mr. Dimmer
received a B.A. in liberal arts and an advanced management degree from the
University of Chicago, C.R.C.
 
KENNETH E. PEREZ has served as Vice President of Marketing of Omnicell since
April 2000. From September 1999 through March 2000, Mr. Perez served as Vice
President of e-Strategies of Omnicell. From November 1998 to August 1999, Mr.
Perez served as Senior Vice President of Marketing for CyberCash, Inc., an
electronic commerce payment solutions company. From 1992 to 1998, Mr. Perez held
a number of positions at Hewlett-Packard Company, including Director of Business
Development for the Extended Enterprise Business Unit. Mr. Perez received a B.A.
in international relations from Stanford University and an M.B.A. from the
Anderson Graduate School of Management at the University of California, Los
Angeles.
 
GARY E. WRIGHT has served as Vice President of Supplier Relations and
International of Omnicell since July 2000. From September 1999 to June 2000,
Mr. Wright served as Vice President of Supplier Relations of Omnicell. From July
1998 until August 1999, Mr. Wright served as Vice President of Business
Development of Omnicell, and from June 1994 until June 1998 Mr. Wright served as
Vice President of Sales and Field Operations of Omnicell. From September 1993 to
May 1994, Mr. Wright served as a Vice President of PCS Health Systems, a managed
healthcare company. Mr. Wright received a B.S. from Northern Illinois
University.
 
GORDON V. CLEMONS has served as a Director of Omnicell since December 1995. He
has been the President, Chief Executive Officer and Chairman of the Board of
CorVel Corp., a provider of managed healthcare services, since 1991. Mr. Clemons
received a B.S. in business and technology from Oregon State University and an
M.B.A. from the University of Oregon.
 
                                       45

<PAGE>
FREDERICK J. DOTZLER has served as a Director of Omnicell since December 1993.
He has been a partner with Medicus Venture Partners, a venture capital firm,
since 1989, and is a managing director of De Novo Ventures. Mr. Dotzler received
a B.S. in industrial engineering from Iowa State University, an M.B.A. from the
University of Chicago and an advanced degree in economics from Louvain
University, Belgium.
 
CHRISTOPHER J. DUNN, M.D. has served as a Director of Omnicell since September
1992. Dr. Dunn has been in private medical practice since 1984. Dr. Dunn
received an M.D. and a master's degree in health service administration from
Stanford University. Dr. Dunn is also Director of the Respiratory Care Unit at
Care West Gateway, Director of Subacute Care at Care West Burlingame and Medical
Director of Critical Care Transport for American Medical Response--Sacramento
Valley. He is a fellow of the American College of Chest Physicians and is an
Associate Clinical Professor of Medicine at Stanford University School of
Medicine.
 
RANDALL A. HACK has served as a Director of Omnicell since September 1995. Mr.
Hack has served as a senior managing director of Nassau Capital L.L.C., a
private investment management firm which he co-founded, since January 1995. From
1990 to 1994, Mr. Hack served as President and Chief Executive Officer of the
Princeton University Investment Company, Princeton's portfolio of public and
private assets. Mr. Hack received a B.A. from Princeton University and an M.B.A.
from Harvard University. Mr. Hack serves as a director of CompHealth Inc.,
Corporate Realty Investment Company L.L.C., Crown Castle International
Corporation, Cypress Communications and Vector ESP, Inc.
 
BENJAMIN A. HOROWITZ has served as a Director of Omnicell since September 1999.
Mr. Horowitz has been President, Chief Executive Officer and a director of
Loudcloud, Inc., an Internet company, since September 1999. From March 1999 to
September 1999, he served as Vice President and General Manager of the
E-commerce Platform division of America Online, Inc. an Internet service
provider. From July 1995 to March 1999, Mr. Horowitz was employed by Netscape
Communications, an Internet company, in various capacities, including Vice
President of the directory and security product line from 1997 to 1998. From
1994 to 1995, Mr. Horowitz was employed by Lotus Development Corporation, a
software company. Mr. Horowitz received a B.S. from Columbia University and an
M.S. in computer science from the University of California, Los Angeles.
 
KEVIN L. ROBERG has served as a Director of Omnicell since June 1997. He has
been a general partner of Delphi Ventures, a venture capital firm, since October
1999. From August 1998 to September 1999, Mr. Roberg was an independent venture
capitalist. From December 1995 to June 1998, Mr. Roberg served as Chief
Executive Officer and President of ValueRx, a pharmacy benefit and medication
management company and a former subsidiary of Value Health, Inc., a healthcare
benefit and information service provider. From April 1995 until it was acquired
by ValueRx in December 1995, Mr. Roberg served as President and Chief Executive
of Medintell Systems Corporation, a pharmaceutical information management
company. From June 1994 to April 1995, Mr. Roberg served as President--Western
Health Plans and President--PRIMExtra, Inc. for EBP Health Plans, Inc., a third
party administrator. Mr. Roberg is also a director of Duane Reade, Inc., a
retail pharmacy company, Accredo Health, Inc., a bio-pharmaceutical company, and
the American Society of Health System Pharmacists Foundation. Mr. Roberg is also
a director and the immediate past chairman of Children's Hospitals and Clinics
of Minneapolis/St. Paul. Mr. Roberg received a B.S. from the University of Iowa.
 
JOHN D. STOBO, JR. has served as a Director of Omnicell since February 2000.
Since November 1998, he has been a managing member of ABS Partners III, LLC,
which is the general partner of ABS Capital Partners III, L.P., a venture
capital firm. From December 1993 to November 1998, Mr. Stobo was a principal of
ABS Capital Partners and related entities. Prior to joining ABS Capital
Partners, Mr. Stobo worked in the healthcare investment banking group at Alex.
Brown & Sons Incorporated, an
 
                                       46

<PAGE>
investment banking firm. Mr. Stobo received a B.A. from the University of
California, San Diego, and an M.B.A. from Cornell University. Mr. Stobo is also
a director of several privately held companies.
 
WILLIAM H. YOUNGER, JR. has served as a Director of Omnicell since September
1992. Mr. Younger is a managing director of the general partner of Sutter Hill
Ventures, a venture capital firm, where he has been employed since 1981. Mr.
Younger holds a B.S. in electrical engineering from the University of Michigan
and an M.B.A. from Stanford University. Mr. Younger is also a director of Vitria
Technology, Inc., Virage, Inc., and several privately held companies.
 
There are no family relationships between any of the directors and officers of
Omnicell.
 
BOARD COMMITTEES
 
Our Board of Directors has a Compensation Committee and an Audit Committee. The
Compensation Committee makes recommendations to the Board of Directors
concerning salaries and incentive compensation for our officers and employees
and administers our stock option plans. The Audit Committee makes
recommendations to the Board of Directors regarding the selection of independent
auditors, reviews the results and scope of the audit and other services provided
by our independent auditors, and reviews and evaluates our audit and control
functions. Members of these committees will serve until their successors are
appointed. Members of our Compensation Committee are Mr. Dotzler, Dr. Dunn and
Mr. Younger. Members of our Audit Committee are Messrs. Clemons, Hack, Stobo and
Younger.
 
DIRECTOR COMPENSATION
 
The members of our Board of Directors do not currently receive compensation for
their services as directors, but are reimbursed for travel expenses in
connection with attendance at Board and committee meetings. We have typically
granted non-employee directors options to purchase 15,625 shares of common stock
at the then fair market value upon election to the Board of Directors. In
February 1998, Dr. Dunn received a non-qualified stock option to purchase 15,625
shares of common stock at an exercise price of $10.40 per share. In September
1999, Mr. Horowitz received a non-qualified stock option to purchase 15,625
shares of common stock at an exercise price of $10.40 per share. These options
vest over a five-year period. In September 1999, each of Messrs. Younger, Hack
and Dotzler received options to purchase 9,375 shares of common stock at an
exercise price of $10.40 per share that vest over a three-year period. In April
2000, Mr. Horowitz received a non-qualified stock option to purchase 6,250
shares of common stock at an exercise price of $10.40 per share that vests over
a 30-month period. In August 2000, Messrs. Younger, Dotzler, and Hack each
received a non-qualified stock option to purchase 4,687 shares of common stock
at an exercise price of $2.00 per share that will vest over a 36-month period
with a six-month cliff, Messrs. Stobo and Clemons each received a non-qualified
stock option to purchase 7,812 shares of common stock at an exercise price of
$2.00 per share that will vest over a 36-month period with a six-month cliff,
Messrs. Dunn and Roberg each received a non-qualified stock option to purchase
7,812 shares of common stock at an exercise price of $2.00 per share that will
vest over a 24-month period with a six-month cliff, and Mr. Horowitz received a
non-qualified stock option to purchase 10,937 shares of common stock at an
exercise price of $2.00 per share that will vest over a 36-month period with a
six-month cliff. Following this offering, each member of our Board of Directors
who is not an employee will be eligible to receive initial and annual stock
option grants to purchase our common stock. These grants are more fully
described below.
 

EXECUTIVE COMPENSATION
 
The following table sets forth all compensation awarded to, earned by or paid to
our Chief Executive Officer and our four next most highly compensated executive
officers whose annual compensation
 
                                       47

<PAGE>
exceeded $100,000 for the year ended December 31, 2000. These individuals are
referred to as the named executive officers in this prospectus.
 
                           SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                                                                       LONG-TERM
                                                                                     COMPENSATION
                                                  ANNUAL COMPENSATION(1)                AWARDS
                                            ----------------------------------   ---------------------
                                                                  OTHER ANNUAL   SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION                  SALARY     BONUS     COMPENSATION        OPTIONS(2)
---------------------------                 --------   --------   ------------   ---------------------
<S>                                         <C>        <C>        <C>            <C>
Sheldon D. Asher .........................  $312,900   $140,421     $      --           172,798
  President, Chief Executive
  Officer and Director
 
Randall A. Lipps .........................   312,900    140,421            --           174,098
  Chairman of the Board
  and Director
 
S. Michael Hanna .........................   160,000    138,546            --            43,282
  Vice President of Sales and
  Field Operations
 
John D. Higham ...........................   200,000     96,464            --            85,469
  Vice President of Engineering
  and Chief Technical Officer
 
Robert Y. Newell, IV .....................   164,583     38,753            --           126,562
  Vice President of Finance and
  Chief Financial Officer
</TABLE>

 
------------------------
 
(1)  In accordance with Securities and Exchange Commission rules, Other Annual
     Compensation in the form of perquisites and other personal benefits has
     been omitted where the aggregate amount of such perquisites and other
     personal benefits constitutes less than the lesser of $50,000 or 10% of the
     total annual salary and bonus for the named executive officer for the
     fiscal year.
 
(2)  These shares are subject to exercise under stock options granted under our
     stock option plans.
 
                                       48

<PAGE>
STOCK OPTION GRANTS
 
The following table sets forth information regarding options granted to each of
the named executive officers during the year ended December 31, 2000.
 

<TABLE>
<CAPTION>
                                              INDIVIDUAL GRANTS
                             ---------------------------------------------------   POTENTIAL REALIZABLE VALUE AT
                             NUMBER OF      PERCENTAGE                                ASSUMED ANNUAL RATES OF
                             SECURITIES      OF TOTAL                               STOCK PRICE APPRECIATION FOR
                             UNDERLYING      OPTIONS                                       OPTION TERM(1)
                              OPTIONS       GRANTED IN     EXERCISE   EXPIRATION   ------------------------------
NAME                         GRANTED(2)   FISCAL 2000(3)   PRICE(4)      DATE           5%               10%
----                         ----------   --------------   --------   ----------   ------------      ------------
<S>                          <C>          <C>              <C>        <C>          <C>               <C>
Sheldon D. Asher...........    43,750          1.88%        $10.40     04/02/10
                               88,850          3.82           2.00     08/23/10
                               40,198          1.73           2.00     08/23/10
 
Randall A. Lipps...........    43,750          1.88          10.40     04/02/10
                               89,062          3.83           2.00     08/23/10
                               41,286          1.78           2.00     08/23/10
 
S. Michael Hanna...........     3,125          0.13          10.40     01/31/10
                               15,626          0.67          10.40     04/02/10
                                6,328          0.27           2.00     08/23/10
                               20,312          0.87           2.00     08/23/10
                               40,078          1.72           2.00     08/23/10
 
John D. Higham.............    15,626          0.67          10.40     04/02/10
                               18,750          0.81           2.00     08/23/10
                                8,906          0.38           2.00     08/23/10
 
Robert Y. Newell, IV.......    75,000          3.23          10.40     01/31/10
                                9,375          0.40          10.40     04/02/10
                               42,187          1.82           2.00     08/23/10
</TABLE>

 
------------------------
 
(1)  Potential realizable values are computed by multiplying the number of
     shares of common stock subject to a given option by the initial public
     offering price of $    per share, assuming that the aggregate stock value
     derived from that calculation compounds at the annual 5% or 10% rate shown
     in the table for the entire ten-year term of the option and subtracting
     from that result the aggregate option exercise price. The 5% and 10%
     assumed annual rates of stock appreciation are mandated by the rules of the
     SEC and do not reflect our estimate or projection of future stock price
     growth.
 
(2)  These options were issued under our 1995 Management Stock Option Plan and
     our 1999 Equity Incentive Plan. Vesting and exercise terms are as follows:
     (a) the options granted in April 2000 vest monthly over a 30-month period
     and (b) the options granted in August 2000 vest monthly over a 24- or
     36-month period.
 
(3)  Based on an aggregate of 2,323,769 shares subject to options granted to our
     employees (not counting grants to non-employees) in the year ended December
     31, 2000, including options granted to the named executive officers.
 
(4)  Options were granted at an exercise price equal to the fair market value of
     our common stock, as determined by the Board of Directors at the date of
     the grant.
 
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
  VALUES
 
The following table sets forth for each of the named executive officers the
shares acquired and the value realized on each exercise of stock options during
the year ended December 31, 2000 and number
 
                                       49

<PAGE>
and value of securities underlying unexercised options held by the named
executive officers at December 31, 2000.
 

<TABLE>
<CAPTION>
                                                            NUMBER OF SECURITIES
                                                           UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                    SHARES                       OPTIONS AT              IN-THE-MONEY OPTIONS AT
                                   ACQUIRED                 DECEMBER 31, 2000(1)         DECEMBER 31, 2000(1)(2)
                                      ON       VALUE     ---------------------------   ---------------------------
NAME                               EXERCISE   REALIZED   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                               --------   --------   -----------   -------------   -----------   -------------
<S>                                <C>        <C>        <C>           <C>             <C>           <C>
Sheldon D. Asher.................  531,941    $665,536     250,986(3)        0         $  (499,484)       $0
 
Randall A. Lipps.................  155,988      20,512     354,447           0          (2,177,018)        0
 
S. Michael Hanna.................  105,178           0      82,318           0            (592,690)        0
 
John D. Higham...................   20,249      45,670      99,218           0            (483,059)        0
 
Robert Y. Newell, IV.............        0           0     126,563           0            (556,875)        0
</TABLE>

 
------------------------
 
(1)  Some of the shares are immediately exercisable; however, the shares
     purchasable under such options are subject to repurchase by us at the
     original exercise price paid per share upon the optionee's cessation of
     service prior to the vesting of such shares. The shares listed as
     exercisable are those shares which are unexercised for which we no longer
     have a right of repurchase if the option is exercised by the holder;
     similarly, the shares listed as unexercisable include those shares over
     which we have a right of repurchase if the option is exercised by the
     holder.
 
(2)  Based on the fair market value of our common stock at year ended December
     31, 2000 ($3.20 per share, as determined by our Board of Directors), less
     the exercise price payable for such shares.
 
(3)  Diane Snedden, Mr. Asher's ex-wife, has the right to receive 128,165 shares
     upon the exercise of vested options pursuant to a divorce agreement and any
     and all proceeds from the sale thereof.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
Our Compensation Committee consists of Mr. Dotzler, Dr. Dunn and Mr. Younger.
None of these individuals is or has been an officer or employee of Omnicell. No
member of the Compensation Committee serves as a member of our board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of our Board of Directors.
 
STOCK PLANS
 
1992 EQUITY INCENTIVE PLAN AND 1995 MANAGEMENT STOCK OPTION PLAN
 
Our 1992 Equity Incentive Plan and 1995 Management Stock Option Plan
(collectively, the Incentive Plans) were adopted by our Board of Directors in
October 1992 and December 1995, respectively. There are currently 3,995,885
shares of common stock authorized for issuance under the Incentive Plans.
 
The Incentive Plans provide for the grant of incentive stock options under the
Internal Revenue Code of 1986, as amended (the Code), to employees and
nonstatutory stock options, restricted stock purchase awards and stock bonuses
to employees, directors and consultants. The Incentive Plans are administered by
our Board of Directors or a committee appointed by the Board of Directors that
determines recipients and types of awards to be granted, including the exercise
price, number of shares subject to the award and the exercisability thereof.
 
The term of stock options granted under the Incentive Plans generally may not
exceed 10 years. The exercise price of options granted under the Incentive Plans
are determined by our Board of Directors, provided that the exercise price for
an incentive stock option cannot be less than 100% of the fair market value of
our common stock on the date of the option grant and the exercise price for a
nonstatutory stock option cannot be less than 85% of the fair market value of
our common stock on the date of option grant. Options granted under the
Incentive Plans vest at the rate specified in the applicable option agreement.
No incentive stock option may be transferred by the optionee other than
 
                                       50

<PAGE>
by will, beneficiary designation or the laws of descent or distribution or, in
certain limited instances, pursuant to a qualified domestic relations order. Our
Board of Directors may grant a nonstatutory stock option that is transferable.
An optionee whose relationship with us or any related corporation ceases for any
reason, other than by death or permanent and total disability, may exercise
options in the three-month period following such cessation, unless such options
terminate or expire sooner or later by their terms. Options may be exercised for
up to twelve months after an optionee's relationship with us and our affiliates
ceases due to death or disability, unless such options expire sooner or later by
their terms.
 
No incentive stock option may be granted to any person who, at the time of the
grant, owns, or is deemed to own, stock possessing more than 10% of the total
combined voting power of Omnicell or any of our affiliates, unless the option
exercise price is at least 110% of the fair market value of the stock subject to
the option on the date of grant and the term of the option does not exceed five
years from the date of grant. The aggregate fair market value, determined at the
time of grant, of the shares of common stock with respect to which incentive
stock options are exercisable for the first time by an optionee and its
affiliates during any calendar year under all of our plans may not exceed
$100,000.
 
Shares subject to options that have expired or otherwise terminated without
having been exercised in full, or vested in the case of restricted stock awards,
will again become available for the grant of awards under the Incentive Plans.
 
Our Board of Directors has the authority to reprice outstanding options and to
offer optionees the opportunity to replace outstanding options with new options
for the same or a different number of shares.
 
We may grant restricted stock awards under the Incentive Plans that are subject
to a repurchase option by us in accordance with a vesting schedule and at a
price determined by our Board of Directors. Restricted stock purchases must be
at a price equal to at least 85% of the stock's fair market value on the award
date, but stock bonuses may be awarded in consideration of past services without
a purchase payment. Rights under a stock bonus or restricted stock purchase
agreement may not be transferred other than by will, the laws of descent and
distribution or a qualified domestic relations order while the stock awarded
pursuant to such an agreement remains subject to the agreement.
 
Under certain changes in control of Omnicell including a dissolution,
liquidation or sale of substantially all of our assets, a merger or
consolidation in which we are not the surviving corporation, or a reverse merger
in which we are the surviving corporation but the shares of common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether securities, cash or otherwise, then to the
extent permitted by applicable law, any surviving corporation will assume any
stock awards, including stock options, outstanding under the Incentive Plans or
substitute similar stock awards, or such stock awards under the Incentive Plans
will continue in full force and effect. In the event any surviving corporation
refuses to assume or continue such stock awards, or to substitute similar stock
awards for those outstanding under the Incentive Plans, then the stock awards
held by participants whose service with us or the surviving corporation has not
terminated shall become fully vested and exercisable prior to the change in
control and any such stock awards are not exercised prior to the change in
control will terminate thereafter.
 
As of February 28, 2001, 1,780,602 shares of common stock had been issued upon
the exercise of options granted under the Incentive Plans, options to purchase
1,823,917 shares of common stock were outstanding at a weighted average exercise
price of $6.09 per share and 391,366 shares of common stock remained available
for future grant. The 1992 Equity Incentive Plan and the 1995 Management Stock
Option Plan will terminate in October 2002 and December 2005, respectively,
unless sooner terminated by our Board of Directors.
 
                                       51

<PAGE>
1997 EMPLOYEE STOCK PURCHASE PLAN
 
In March 1997, our Board of Directors approved the 1997 Employee Stock Purchase
Plan which was amended in September 1999 and in April 2000. The 1997 plan is
intended to qualify as an employee stock purchase plan within the meaning of
that term in Section 423 of the Code. Under the 1997 plan, our Board of
Directors may authorize participation by eligible employees, including officers,
in periodic offerings following the adoption of the 1997 plan. The offering
period for any offering will be no more than 27 months.
 
The 1997 plan, as amended in September 1999 and April 2000, authorizes the
issuance of 468,750 shares of common stock under the 1997 plan which amount is
increased each January 1 by the lesser of 312,500 or 1.5% of the number of
shares of common stock outstanding each January 1 beginning January 1, 2001 and
ending January 1, 2007. However, our Board of Directors has the authority to
designate a smaller number of shares by which the authorized number of shares of
common stock will be increased on each January 1.
 
Employees are eligible to participate if they are employed by Omnicell or an
affiliate of Omnicell designated by our Board of Directors and are regularly
employed at least 20 hours per week and five months per year. Employees who
participate in an offering can have up to 15% of their earnings withheld
pursuant to the 1997 plan and applied, on specified dates determined by the
Board of Directors, to the purchase of shares of common stock. The price of
common stock purchased under the 1997 plan will be equal to 85% of the lower of
the fair market value of the common stock on the commencement date of each
offering period or the relevant purchase date. Employees may end their
participation in the offering at any time during the offering period, and
participation ends automatically on termination of employment with Omnicell.
 
In the event of certain changes of control of Omnicell, our Board of Directors
has discretion to provide that each right to purchase common stock will be
assumed or an equivalent right substituted by the successor corporation, or our
Board of Directors may shorten the offering period and provide for all sums
collected by payroll deductions to be applied to purchase stock immediately
prior to the change in control. The 1997 plan will terminate when all shares
reserved for issuance under the 1997 plan have been issued or sooner at the the
discretion of our Board of Directors.
 
As of February 28, 2001, we had issued 340,463 shares of common stock under the
1997 plan and 174,488 shares remain available for future issuance.
 
1999 EQUITY INCENTIVE PLAN
 
Our 1999 Equity Incentive Plan was adopted by our Board of Directors in
September 1999 and amended in April 2000. The 1999 plan was established to
replace the Incentive Plans. The 1999 plan will terminate in September 2009,
unless sooner terminated by our Board of Directors.
 
The 1999 plan provides for the grant of incentive stock options under Code
Section 422 to employees, including officers and employee-directors, and
nonstatutory stock options, restricted stock purchase awards and stock bonuses
to employees, directors and consultants. The 1999 plan is administered by our
Board of Directors or a committee appointed by the Board that determines
recipients and the terms and types of awards to be granted, including the
exercise price, number of shares subject to the award and the exercisability
thereof.
 
Stock option grants under the 1999 plan are made pursuant to an option
agreement. The term of stock options granted under the 1999 plan generally may
not exceed 10 years. The exercise price of options granted under the 1999 plan
is determined by our Board of Directors, provided that the exercise price for an
incentive stock option cannot be less than 100% of the fair market value of the
common stock on the date of the option grant and the exercise price for a
nonstatutory stock option cannot be less than 85% of the fair market value of
the common stock on the date of the option grant.
 
                                       52

<PAGE>
Options granted under the 1999 plan vest at the rate specified in the option
agreement. No incentive stock options may be transferred by the optionee other
than by will, beneficiary designation or the laws of descent and distribution
or, in certain limited instances, pursuant to a qualified domestic relations
order. Our Board of Directors may grant a nonstatutory stock option that is
transferable. An optionee whose relationship with us or our affiliates ceases
for any reason may exercise options in the three-month period following such
cessation, unless such options terminate or expire sooner or later by their
terms. Unless the options expire sooner or later by their terms, options may be
exercised for up to twelve months after an optionee's relationship with us and
our affiliates ceases due to disability and for up to 18 months after an
optionee's relationship with us and our affiliates ceases due to death.
 
No incentive stock options may be granted to any person who, at the time of the
grant, owns, or is deemed to own, stock possessing more than 10% of the total
combined voting power of us or of our affiliates, unless the option exercise
price is at least 110% of the fair market value of the stock subject to the
option on the date of the grant, and the term of the option does not exceed five
years from the date of the grant. The aggregate fair market value, determined at
the time of the grant, of the shares of common stock with respect to which
incentive stock options are exercisable for the first time by an optionee during
any calendar year, under all such plans of ours and our affiliates, may not
exceed $100,000.
 
Under the 1999 plan, 3,125,000 shares of common stock are authorized for
issuance. Each January 1, beginning January 1, 2001 and ending on January 1,
2009, the number of shares of common stock authorized for issuance under the
1999 plan will be increased on each January 1 by the lesser of (i) 1,875,000
shares, or (ii) 5.5% of the number of shares of common stock outstanding on that
date. However, our Board of Directors has the authority to designate a smaller
number of shares by which the authorized number of shares of common stock will
be increased on each January 1.
 
Shares subject to stock awards that have expired or otherwise terminated without
having been exercised in full, or vested in the case of restricted stock awards,
shall again become available for the grant of awards under the 1999 plan. Shares
subject to stock awards issued under the 1999 plan that have expired or
otherwise terminated without having been exercised in full, or vested in the
case of restricted stock awards, shall also become available for the grant of
awards under the 1999 plan. Shares issued under the 1999 plan may be previously
unissued shares or reacquired shares bought on the market or otherwise.
 
Restricted stock purchase awards granted under the 1999 plan may be granted
pursuant to a repurchase option in our favor in accordance with a vesting
schedule and at a price determined by our Board of Directors. Restricted stock
purchases must be at a price equal to 85% of the stock's fair market value on
the award date, but stock bonuses may be awarded in consideration of past
services without a purchase payment. Rights under a stock bonus or restricted
stock purchase agreement may not be transferred other than by will, the laws of
descent and distribution or a qualified domestic relations order while the stock
awarded pursuant to such an agreement remains subject to the agreement.
 
Under certain changes in control of Omnicell including a dissolution,
liquidation or sale of substantially all of our assets, a merger or
consolidation in which we are not the surviving corporation, or a reverse merger
in which we are the surviving corporation but the shares of common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether securities, cash or otherwise, then to the
extent permitted by applicable law, any surviving corporation will assume any
stock awards, including stock options, outstanding under the 1999 plan or
substitute similar stock awards, or such stock awards under the 1999 plan will
continue in full force and effect. In the event any surviving corporation
refuses to assume or continue such stock awards, or to substitute similar stock
awards for those outstanding under the 1999 plan, then the stock awards held by
participants whose service with us or the surviving corporation has not
terminated shall become fully
 
                                       53

<PAGE>
vested and exercisable prior to the change in control and any such stock awards
that are not exercised prior to the change in control will terminate thereafter.
 
As of February 28, 2001, 148,943 shares of common stock had been issued upon
exercise of options granted under the 1999 plan. Options to purchase 1,854,419
shares of common stock were outstanding at a weighted average exercise price of
$7.13 per share and 676,410 shares of common stock remained available for future
grant. The 1999 plan will terminate in September 2009, unless sooner terminated
by our Board of Directors.
 
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
 
The 1999 plan provides for automatic stock option grants to non-employee
directors on our Board of Directors. After the offering, each person who is not
an employee of Omnicell who is elected or appointed to our Board of Directors
will be granted an initial grant on the date of his or her election or
appointment to purchase 25,000 shares of our common stock at the fair market
value of our common stock on that grant date. On the date of the offering,
non-employee directors of our Board who have not previously been granted options
to purchase our common stock will receive an initial stock option grant as if he
or she were first elected or appointed to our Board of Directors after the
offering. The non-employee directors become vested in each initial stock option
grant 1/36 after each month of service on our Board of Directors from the stock
option grant date so that the directors will become vested fully after
36 months of service on our Board of Directors after the grant.
 
After the offering, each person who is a non-employee director on the day after
each annual stockholders' meeting, shall, on that date, be granted an annual
stock option grant to purchase 6,250 shares of our common stock at the fair
market value of our common stock on that grant date. The non-employee directors
become vested in each annual stock option grant 1/12 after each month of service
on our Board from the stock option grant date so that the directors will become
vested fully after 12 months of service on our Board of Directors after the
grant.
 
The non-employee director stock options will have a maximum term of ten years
and generally must be exercised prior to the earliest of 18 months following the
death of the non-employee directors, 12 months from the termination of service
on our Board of Directors by the non-employee director due to a disability,
three months from the termination of the service of non-employee director for
any other reason, or the expiration of the original term of the stock options.
The stock options shall not be transferable except as otherwise provided in a
stock option agreement to the extent permitted by federal securities laws and
regulations. If there is a change of control as described above, the directors
will become fully vested in their unvested portion of their stock options and
the options will be exercisable for a period of the shorter of twelve months
following the termination of their service on our Board of Directors or the
original term of the stock options.
 
401(k) PLAN
 
In October 1993, we adopted a tax-qualified employee savings plan under
Section 401(k) of the Code covering our employees. Pursuant to the 401(k) plan,
eligible employees may elect to reduce their current compensation by up to the
lesser of 15% of their annual compensation or the statutorily prescribed annual
limit and have the amount of such reduction contributed to the 401(k) plan. In
addition, eligible employees may make rollover contributions to the 401(k) plan
from a tax-qualified retirement plan. The 401(k) plan is intended to qualify
under Section 401(a) of the Code, so that contributions by employees or us to
the 401(k) plan, and income earned on the 401(k) plan contributions, are not
taxable to employees until withdrawn from the 401(k) plan, and so that
contributions by us, if any, will be deductible by us when made. We do not
presently intend to make any matching or discretionary contributions.
 
                                       54

<PAGE>
EMPLOYMENT ARRANGEMENTS
 
In December 1993, we entered into an employment agreement with Mr. Asher whereby
Mr. Asher agreed to serve as our President and Chief Executive Officer. The
agreement provides Mr. Asher with an annual base salary of at least $200,000, a
performance bonus of at least $50,000 and $1,000,000 of term life insurance, the
owner and beneficiary of which are to be designated by Mr. Asher. In the event
of termination without cause, Mr. Asher will be entitled to receive the base
salary amount then in effect plus $50,000 for one year following the date of
termination.
 
In February 1998 and in February 2000, our Board of Directors approved the
acceleration, under certain circumstances, of all prior stock options granted to
each officer under our equity incentive plans. Under this arrangement, the
unvested portion of each officer's stock options under our equity incentive
plans becomes fully-vested and exercisable if we are acquired and the officer is
terminated without cause, the principal place of performance of the officer's
responsibilities and duties is changed, or there is a material reduction in the
officer's responsibilities and duties.
 
INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY
 
Section 145 of the Delaware General Corporation Law authorizes a court to award,
or a corporation's board of directors to grant, indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities, including reimbursement for expenses
incurred, arising under the Securities Act.
 
As permitted by Delaware law, our Certificate of Incorporation, which will
become effective upon the closing of this offering, includes a provision that
eliminates the personal liability of our directors for monetary damages for
breach of fiduciary duty as a director, except for liability:
 
    - for any breach of the director's duty of loyalty to us or our
      stockholders;
 
    - for acts or omissions not in good faith or that involve intentional
      misconduct or a knowing violation of law;
 
    - under Section 174 of the Delaware law regarding unlawful dividends and
      stock purchases; or
 
    - for any transaction from which the director derived an improper personal
      benefit.
 
As permitted by Delaware law, our Certificate of Incorporation and/or our
Bylaws, which will become effective upon the closing of this offering, provide
that:
 
    - we are required to indemnify our directors and officers to the fullest
      extent permitted by Delaware law, so long as such person acted in good
      faith and in a manner the person reasonably believed to be in or not
      opposed to the best interests of Omnicell, and with respect to any
      criminal action or proceeding, had no reasonable cause to believe the
      person's conduct was unlawful;
 
    - we are permitted to indemnify our other employees to the extent that we
      indemnify our officers and directors, unless otherwise required by law,
      our Certificate of Incorporation, our Bylaws or agreements;
 
    - we are required to advance expenses, as incurred, to our directors and
      officers in connection with a legal proceeding to the fullest extent
      permitted by Delaware law, subject to certain very limited exceptions; and
 
    - the rights conferred in our Bylaws are not exclusive.
 
Prior to the closing of this offering, we intend to enter into indemnity
agreements with each of our current directors and officers to give such
directors and officers additional contractual assurances regarding the scope of
the indemnification set forth in our Certificate of Incorporation and our Bylaws
and to provide additional procedural protections. At present, there is no
pending litigation or proceeding involving any of our directors, officers or
employees regarding which indemnification is sought, nor are we aware of any
threatened litigation that may result in claims for indemnification.
 
                                       55

<PAGE>

                           RELATED PARTY TRANSACTIONS
 
Pursuant to his employment agreement, in December 1993, we loaned Mr. Asher an
aggregate of $200,000 with an interest rate of 4% per year for the purchase of
92,165 shares of Series D Preferred Stock. The purchase price of $2.17 per share
was equal to the fair market value of the shares at the time of the sale. Twenty
percent of this loan matured each year beginning on January 1, 1995 and was
forgiven at such time so long as Mr. Asher remained employed by us. This loan
has been completely forgiven.
 
Pursuant to the Series E Preferred Stock Purchase Agreements dated December 22,
1993, the purchasers therein agreed to vote their shares to elect to our Board
of Directors a designated representative of Medicus Venture Partners 1993.
Medicus' right to elect a representative to our Board of Directors expires
following the completion of this offering. Mr. Dotzler has been the designated
representative thereunder.
 
Pursuant to the terms of the Series H Stock Purchase Agreement, dated September
18, 1995, we agreed to nominate and use our best efforts to elect the designated
representative of Nassau Capital, L.L.C. to our Board of Directors. Nassau's
right to elect a representative to our Board of Directors expires following the
completion of this offering. Mr. Hack is the current designated representative
of Nassau Capital.
 
We entered into a Stock Purchase Agreement with Sun Healthcare, dated June 7,
1996, for 1,802,000 shares of Series I Preferred Stock. In July 1996, the
non-voting Series I Preferred Stock was converted into voting Series J Preferred
Stock on a one-for-one basis.
 
In the years ended December 31, 1998, 1999 and 2000, we recorded revenues of
$9.9 million, $5.1 million and $1.9 million, from sales to Sun Healthcare,
representing approximately 20.5%, 9.6% and 2.9% of our revenues, respectively,
for the year. Sun Healthcare earned a cash rebate of $0.4 million for purchases
made from us during the year ended December 31, 1998.
 
In January 1999, Sun Healthcare exercised its right to have us redeem all of its
Series J Preferred Stock on a quarterly basis over the succeeding ten quarters.
During 1999 and 2000, we redeemed 1,081,200 shares of Series J Preferred Stock
at an approximate price per share of $14.03 for an aggregate redemption amount
of approximately $15.2 million. In addition, we paid Sun Healthcare accrued
interest on the Series J Preferred Stock of approximately $2.7 million. These
redemptions and interest payments were paid for with cash of $11.6 million and
the balance was paid for by offsetting Sun Healthcare's outstanding accounts
receivable balances of $6.3 million. We were not obligated to make the three
quarterly redemption payments of $2.5 million each that otherwise would have
been due in September 2000, December 2000 and March 2001 because we did not meet
certain balance sheet tests under California law. Upon the closing of this
offering, we intend to make such redemption payments. The remaining 180,200
shares of Series J Preferred Stock will automatically convert to common stock
upon the completion of this offering, assuming the price per share to the
public, prior to deducting the underwriter commissions and offering expenses, is
more than $11.78.
 
Pursuant to the terms of the Series K Stock Purchase Agreement, dated January
20, 2000, we agreed to nominate and use our best efforts to elect the designated
representative of ABS Capital Partners to our Board of Directors. ABS's right to
elect a representative to our Board of Directors expires following the
completion of this offering. Mr. Stobo is the current designated representative
of ABS Capital Partners.
 
                                       56

<PAGE>
In April, May, August, September, October and November 2000, we made loans to
the following executive officers to exercise stock options:
 

<TABLE>
<CAPTION>
NAME                                                           AMOUNT            DUE DATE
----                                                        -------------   ------------------
<S>                                                         <C>             <C>
Sheldon D. Asher..........................................  $2,006,879.50      August 28, 2003
Sheldon D. Asher..........................................      57,195.18      August 28, 2003
Sheldon D. Asher..........................................     258,097.50    September 6, 2003
Randall A. Lipps..........................................      30,768.00   September 30, 2003
Randall A. Lipps..........................................     260,697.50   September 30, 2003
S. Michael Hanna..........................................     399,997.00          May 4, 2003
S. Michael Hanna..........................................     133,437.50     October 10, 2003
John D. Higham............................................      30,000.00     October 10, 2003
</TABLE>

 
The loans totaled $3,177,072 for the exercise of stock options to purchase
808,110 shares of our common stock at an average exercise price of $3.93 per
share. Each loan was made under a promissory note secured by the pledge of
shares of our common stock acquired upon exercise of stock options. The notes
bear interest at 6.20% and 6.71% per year.
 
                                       57

<PAGE>
                             PRINCIPAL STOCKHOLDERS
 
The following table sets forth certain information with respect to the
beneficial ownership of our outstanding common stock as of February 28, 2001,
and as adjusted to reflect the sale of the shares of common stock offered
hereby: (1) by each person or entity who is known by us to own beneficially more
than 5% of the common stock; (2) by each of our directors; (3) by our Chief
Executive Officer, (4) by our other named executive officers, and (5) by all of
our directors and executive officers as a group. The table assumes the
conversion of all outstanding preferred stock into common stock upon the
completion of this offering. Except as otherwise noted, the stockholders named
in the table have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them, subject to applicable
community property laws. Unless otherwise indicated in the table, the address of
each stockholder identified in the table is 1101 East Meadow Drive, Palo Alto,
California 94303.
 

<TABLE>
<CAPTION>
                                                                              SHARES ISSUABLE
                                                                                PURSUANT TO           PERCENT
                                                           SHARES OMNICELL        OPTIONS          BENEFICIALLY
                                                           MAY REPURCHASE       EXERCISABLE          OWNED(1)
                                              SHARES      WITHIN 60 DAYS OF   WITHIN 60 DAYS    -------------------
                                           BENEFICIALLY     FEBRUARY 28,      OF FEBRUARY 28,    BEFORE     AFTER
NAME OF BENEFICIAL OWNER                      OWNED             2001               2001         OFFERING   OFFERING
------------------------                   ------------   -----------------   ---------------   --------   --------
<S>                                        <C>            <C>                 <C>               <C>        <C>
Entities affiliated with Sutter Hill
 Ventures(2).............................   2,636,938            4,427               4,688        17.8
  755 Page Mill Road, Suite A-200
  Palo Alto, CA 94306
ABS Capital Partners III, L.P.(3)........   2,066,676               --              23,438        14.0
  505 Sansome Street, Suite 1550
  San Francisco, CA 94111
Medicus Venture Partners(4)..............   1,075,943               --              14,063         7.3
  12930 Saratoga Avenue, Suite D8
  Saratoga, CA 95070
FFT Partners II, L.P.....................   1,033,338               --                  --         7.0
  10 Glenville Street
  Greenwich, CT 06831
Nassau Capital Partners L.P.(5)..........   1,015,993               --              14,063         6.9
  22 Chambers Street
  Princeton, NJ 08542
William H. Younger, Jr.(2)...............   2,636,938            4,427               4,688        17.8
John D. Stobo, Jr.(3)....................   2,066,676               --              23,438        14.0
Frederick J. Dotzler(4)..................   1,075,943               --              14,063         7.3
Randall A. Hack(5).......................   1,015,993               --              14,063         6.9
Randall A. Lipps(6)......................     773,176           96,801             354,447         7.4
Sheldon D. Asher(7)......................     703,998          112,160             250,986         6.4
Christopher J. Dunn, M.D.................      38,604               --              20,833           *
Gordon V. Clemons........................           0               --              23,438           *
Kevin L. Roberg..........................           0               --              23,438           *
Benjamin A. Horowitz.....................           0               --              32,813           *
John D. Higham(8)........................     167,961           10,834              99,218         1.8
S. Michael Hanna.........................     113,486           48,212              82,318         1.3
Robert Y. Newell, IV.....................      30,584               --             126,563         1.0
All directors and executive officers as a
 group (13 persons)......................   8,623,359          272,434           1,070,306        60.9
</TABLE>

 
------------------------------
 
*   Represents beneficial ownership of less than 1.0%.
 
                                       58

<PAGE>
(1)  Applicable percentage ownership is based on 14,861,351 shares of common
     stock outstanding as of February 28, 2001. Beneficial ownership is
    determined in accordance with the rules of the SEC, based on factors
    including voting and investment power with respect to shares, subject to the
    applicable community property laws. Shares of common stock subject to
    options or warrants currently exercisable, or exercisable within 60 days
    after February 28, 2001, are deemed outstanding for the purpose of computing
    the percentage ownership of the person holding such options or warrants, but
    are not deemed outstanding for computing the percentage ownership of any
    other person.
 
(2)  Includes 1,222,125 shares of common stock owned by Sutter Hill Ventures, A
     California Limited Partnership (Sutter Hill); 316,801 shares of common
    stock owned by Mr. Younger, a member of our Board of Directors and a
    managing director of Sutter Hill Ventures LLC, the general partner of Sutter
    Hill; 636,209 shares owned by the four other managing directors and one
    other director of Sutter Hill Ventures LLC, a retirement trust of one of the
    managing directors of Sutter Hill LLC, and family partnerships associated
    with the managing directors of Sutter Hill LLC; and 461,801 shares owned by
    other entities and individuals associated with Sutter Hill Ventures. Mr.
    Younger and the other managing directors of Sutter Hill Ventures LLC
    disclaim beneficial ownership in the shares listed above except as to their
    individual pecuniary interest therein.
 
(3)  Includes 2,058,881 shares of common stock held by ABS Capital Partners III,
     L.P. Mr. Stobo, a member of our Board of Directors, is a managing member of
    ABS Partners III, LLC, the general partner of ABS Capital Partners III, L.P.
    Mr. Stobo disclaims beneficial ownership of such shares held by ABS Capital
    Partners except to the extent of his pecuniary interest therein.
 
(4)  Consists of 13,780 shares of common stock held by Mr. Dotzler, 599,438
     shares of common stock held by Medicus Venture Partners 1993, L.P.; 362,088
    shares of common stock held by Medicus Venture Partners 1994, L.P.; and
    100,637 shares of common stock held by Medicus Venture Partners 1995, L.P.
    (the Medicus Entities). Medicus Management Partners and a limited
    partnership affiliated with The Hillman Company are the general partners of
    each of the Medicus Entities. Mr. Dotzler, a member of our Board of
    Directors, and John Reher are general partners of Medicus Management
    Partners. The Hillman Company is controlled by Henry L. Hillman, Elsie
    Hilliard Hillman and C. G. Grefenstette, Trustees of the Henry L. Hillman
    Trust U/A dated November 18, 1985. The trustees share the power to vote and
    dispose of shares representing a majority of the voting shares of the
    Hillman Company. Mr. Dotzler disclaims beneficial ownership of such shares
    held by the Medicus Entities, except to the extent of his pecuniary interest
    therein.
 
(5)  Includes 1,009,753 shares of common stock held by Nassau Capital Partners
     L.P., and 6,240 shares of common stock held by NAS Partners L.L.C. Mr.
    Hack, a member of our Board of Directors, is a member of NAS Partners L.L.C.
    and a member of Nassau Capital L.L.C., the sole general partner of Nassau
    Capital Partners L.P. The members of Nassau Capital L.L.C., disclaim that
    they are beneficial owners of shares of Nassau Capital Partners L.P. Mr.
    Hack disclaims beneficial ownership of the shares held by such entities
    except to the extent of his proportionate interest therein.
 
(6)  Includes an aggregate of 95,000 shares held in trusts, of which Mr. Lipps
     is a trustee, for the benefit of Mr. Lipps' minor children.
 
(7)  Includes 651,259 shares held by the Sheldon D. Asher Trust, dated August
     31, 1998. Diane Snedden, Mr. Asher's ex-wife, has the right to receive
    128,165 shares upon the exercise of vested options pursuant to a divorce
    agreement. Mr. Asher disclaims beneficial ownership of these shares. Also
    includes 25,000 shares held by the Asher Family Special Trust, dated
    November 25, 1991, FBO Rachel A. Asher, Mr. Asher's minor child, 25,000
    shares held by the Asher Family Special Trust, dated November 25, 1991, FBO
    Emily R. Asher, Mr. Asher's minor child, for both of which Diane Snedden is
    Trustee, 688 shares held by Bernard Asher, custodian for Emily Rose Asher
    under IL Uniform Trust to Minors Act, and 688 shares held by Bernard Asher,
    custodian for Rachel Ann Asher under IL Uniform Trust to Minors Act. Bernard
    Asher is Mr. Asher's brother. Mr. Asher disclaims beneficial ownership of
    these shares.
 
(8)  Includes 138,620 shares held by the Higham-Bunker 1991 Family Trust, John
     D. Higham or Carol L. Bunker, Trustees; and 6,250 shares held by John D.
    Higham or Carol L. Bunker, Guardians of Christina L. Higham.
 
                                       59

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK
 
GENERAL
 
Upon the closing of this offering, we will be authorized to issue 50,000,000
shares of common stock, $.001 par value, and 5,000,000 shares of undesignated
preferred stock, $.001 par value. As of February 28, 2001, there were 14,861,351
shares of common stock outstanding held of record by approximately 545
stockholders, treating all outstanding preferred stock on an as converted basis.
 
COMMON STOCK
 
The issued and outstanding shares of common stock are, and the shares of common
stock being offered by us hereby will be upon payment therefor, validly issued,
fully paid and nonassessable. Subject to the prior rights of the holders of any
preferred stock, the holders of outstanding shares of common stock are entitled
to receive dividends out of assets legally available therefor at such times and
in such amounts as the Board of Directors may from time to time determine. The
shares of common stock are neither redeemable nor convertible and the holders
thereof have no preemptive or subscription rights to purchase any of our
securities. Upon liquidation, dissolution or winding up of Omnicell, the holders
of common stock are entitled to receive pro rata our assets which are legally
available for distribution, after payment of all debts and other liabilities and
subject to the prior rights of any holders of any preferred stock then
outstanding. Each outstanding share of common stock is entitled to one vote on
all matters submitted to a vote of stockholders and has cumulative voting rights
with respect to the election of directors.
 
WARRANTS
 
As of February 28, 2001, there were outstanding warrants to purchase an
aggregate of 11,521 shares of common stock at an exercise price of $1.74 per
share, an aggregate of 14,452 shares of common stock at an exercise price of
$9.84 per share, an aggregate of 44,961 shares of common stock at an exercise
price of $5.88 per share, and an aggregate of 31,249 shares of common stock at
an exercise price of $5.00. Warrants to purchase an aggregate of 62,503 shares
of common stock expire three years from the effective date of this offering, an
aggregate of 8,431 shares of common stock expire on July 7, 2005 and an
aggregate of 31,249 shares of common stock expire on August 11, 2005.
 
PREFERRED STOCK
 
Upon the closing of this offering, (i) all outstanding shares of convertible
preferred stock (except the Series J Preferred Stock) will be converted into
shares of common stock, provided that the price per share to the public is not
less than $8.00 and the aggregate price to the public is not less than
$25,000,000, in each case prior to the deduction of underwriter commissions and
offering expenses, (ii) 180,200 outstanding shares of Series J Preferred Stock
will be converted into shares of common stock, provided that the price per share
to the public is not less than $11.78 per share and the aggregate price to the
public is not less than $10,000,000, in each case prior to the deduction of
underwriter commissions and offering expenses and (iii) 540,600 shares of
Series J Preferred Stock will be redeemed. Outstanding shares of the Series J
Preferred Stock are currently being redeemed at $14.03274 per share on a
quarterly basis spread out in ten equal quarterly installments beginning on
March 8, 1999. The first six payments have been made. Since September 2000, the
three quarterly redemption payments of $2.5 million each that were due in
September 2000, December 2000 and March 2001, have not been made as we were not
obligated to make them because we did not meet certain balance sheet tests under
California law. The unredeemed balance of the Series J Preferred Stock accrues
interest at 9.5% per year. Effective upon the closing of this offering, we will
be authorized to issue 5,000,000 shares of undesignated preferred stock. The
Board of Directors will have the authority to issue the preferred stock in one
or more series and to fix the price, rights, preferences,
 
                                       60

<PAGE>
privileges and restrictions thereof, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting a series or the
designation of such series, without any further vote or action by our
stockholders. The issuance of preferred stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of delaying, deferring or preventing a change in
control of Omnicell without further action by the stockholders and may adversely
affect the market price of the common stock and the voting and other rights of
the holders of common stock. We have no current plans to issue any shares of
preferred stock.
 
REGISTRATION RIGHTS
 
The holders of approximately 11,714,782 shares of common stock, as of
February 28, 2001, and their permitted transferees are entitled to certain
rights with respect to the registration of these shares under the Securities
Act. Under the terms of agreements between us and the holders, the holders of at
least 40% of these shares may require, on two occasions, that we use our best
efforts to register these shares for public resale. The holders of these shares
may not exercise this right until four months after the effective date of this
offering. In addition, if we propose to register any of our securities under the
Securities Act, either for our own account or for the account of other security
holders exercising registration rights, the holders are entitled to notice of
such registration and are entitled to include shares of such common stock
therein. The holders of these shares may also require us on no more than four
occasions to register all or a portion of these shares on Form S-3 under the
Securities Act when use of such form becomes available to us. All such
registration rights are subject to conditions and limitations, including the
right of the underwriters of an offering to limit the number of shares to be
included in such registration. If such holders, by exercising their demand
registration rights, cause a large number of securities to be registered and
sold in the public market, such sales could have an adverse effect on the market
price for our common stock. If we were to initiate a registration and include
shares held by such holders pursuant to the exercise of their piggyback
registration rights, such sales may have an adverse effect on our ability to
raise capital.
 
ANTI-TAKEOVER PROVISIONS
 
DELAWARE LAW
 
Upon the closing of this offering, we will be subject to the provisions of
Section 203 of the Delaware General Corporation Law. In general, the statute
prohibits a publicly held Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that the stockholder became an interested stockholder unless:
 
    - prior to the date, the board of directors of the corporation approved
      either the business combination or the transaction that resulted in the
      stockholder becoming an interested stockholder;
 
    - upon consummation of the transaction that resulted in the stockholder's
      becoming an interested stockholder, the interested stockholder owned at
      least 85% of the voting stock of the corporation outstanding at the time
      the transaction commenced, excluding those shares owned by persons who are
      directors and also officers, and employee stock plans in which employee
      participants do not have the right to determine confidentially whether
      shares held subject to the plan will be tendered in a tender or exchange
      offer; or
 
    - on or subsequent to the date, the business combination is approved by the
      board of directors and authorized at an annual or special meeting of
      stockholders, and not by written consent, by the affirmative vote of at
      least two-thirds of the outstanding voting stock that is not owned by the
      interested stockholder.
 
                                       61

<PAGE>
Section 203 defines "business combination" to include:
 
    - any merger or consolidation involving the corporation and the interested
      stockholder;
 
    - any sale, transfer, pledge or other disposition involving the interested
      stockholder of 10% or more of the assets of the corporation;
 
    - subject to exceptions, any transaction that results in the issuance or
      transfer by the corporation of any stock of the corporation to the
      interested stockholder; or
 
    - the receipt by the interested stockholder of the benefit of any loans,
      advances, guarantees, pledges or other financial benefits provided by or
      through the corporation.
 
In general, Section 203 defines an interested stockholder as any entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by the entity or person.
 
CHARTER AND BYLAW PROVISIONS
 
Our Certificate of Incorporation and Bylaws include a number of provisions that
may have the effect of deterring or impeding hostile takeovers or changes of
control or management. These provisions include:
 
    - our Board of Directors is classified into three classes of directors with
      staggered three-year terms;
 
    - the authority of our Board of Directors to issue up to 5,000,000 shares of
      preferred stock and to determine the price and the rights, preferences and
      privileges of these shares, without stockholder approval;
 
    - all stockholder action must be effected at a duly called meeting of
      stockholders and not by written consent; and
 
    - the elimination of cumulative voting.
 
Such provisions may have the effect of delaying or preventing a change of
control.
 
Our Certificate of Incorporation and Bylaws provide that we will indemnify
executive officers and directors against losses that they may incur in
investigations and legal proceedings resulting from their services to us, which
may include services in connection with takeover defense measures. Such
provisions may have the effect of preventing changes in our management.
 
OPTION ACCELERATION
 
In February 1998, February 2000 and March 2001 our Board of Directors approved
resolutions providing that the unvested portion of each officer's stock options
under our equity incentive plans becomes fully vested and exercisable if we are
acquired and the officer is thereafter terminated without cause, forced to
change the principal place of performance of the officer's responsibilities and
duties, or placed in a position with a material reduction in the officer's
responsibilities and duties.
 
TRANSFER AGENT AND REGISTRAR
 
The transfer agent and registrar for our common stock is Equiserve.
 
NATIONAL MARKET LISTING
 
We have applied for listing of our common stock on the Nasdaq National Market
under the symbol "OMCL."
 
                                       62

<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
Prior to this offering, there has been no public market for our common stock.
Future sales of substantial amounts of our common stock in the public market
could adversely affect prevailing market prices from time to time. For a period
of 180 days or more following this offering substantial amounts of our common
stock will not be freely tradable due to contractual and legal restrictions as
described below. Sales of substantial amounts of our common stock in the public
market after these restrictions lapse could depress the prevailing market price
and limit our ability to raise equity capital in the future.
 
Upon the closing of this offering and based on shares outstanding as of
February 28, 2001, we will have an aggregate of         shares of common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options or warrants. Of the outstanding shares, the
shares sold in this offering will be freely tradable, except that any shares
held by our "affiliates", as that term is defined in Rule 144 promulgated under
the Securities Act, may only be sold in compliance with the limitations
described below. The remaining shares of common stock held by existing
stockholders will be deemed restricted securities as defined under Rule 144.
Restricted securities may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rules 144, 144(k) or 701
promulgated under the Securities Act, which are summarized below. In accordance
with the lock-up agreements described below and subject to the provisions of
Rules 144, 144(k) and 701 and a right of repurchase in favor of us applicable to
some of our common stock, additional shares will be available for sale in the
public market at the following times:
 

<TABLE>
<CAPTION>
NUMBER OF SHARES                                    DATE
----------------        ------------------------------------------------------------
<C>                     <S>
                        After the date of this prospectus
      5,158,236         180 days from the date of this prospectus
      9,703,115         At various times after 180 days from the date of this
                        prospectus
</TABLE>

 
In general, under Rule 144, as currently in effect, a person, or persons whose
shares are aggregated, including an affiliate, who has beneficially owned shares
for at least one year is entitled to sell, within any three-month period
commencing 90 days after the date of this prospectus, a number of shares that
does not exceed the greater of 1% of the then outstanding shares of common
stock, which will equal approximately       shares immediately after this
offering or the average weekly trading volume in the common stock during the
four calendar weeks preceding the date on which notice of such sale is filed,
subject to certain restrictions. In addition, a person who is not deemed to have
been an affiliate of ours at any time during the 90 days preceding a sale and
who has beneficially owned the shares proposed to be sold for at least two years
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. To the extent that shares were acquired from an
affiliate of ours, the person's holding period for the purpose of effecting a
sale under Rule 144 commences on the date of transfer from the affiliate.
 
Employees, officers, directors, advisors or consultants who purchased our common
stock pursuant to a written compensatory plan or contract are entitled to rely
on the resale provisions of Rule 701, which permits non-affiliates to sell their
Rule 701 shares without having to comply with the public information, holding
period, volume limitation or notice provisions of Rule 144 and permits
affiliates to sell their Rule 701 shares without having to comply with Rule
144's holding period restrictions, in each case commencing 90 days after we
become subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934.
 
LOCK-UP AGREEMENTS
 
Our directors, officers and stockholders who hold approximately         shares
in the aggregate, have agreed that they will not offer, sell or agree to sell,
directly or indirectly, or otherwise dispose of any
 
                                       63

<PAGE>
shares of common stock without the prior written consent of
U.S. Bancorp Piper Jaffray for a period of 180 days from the date of this
prospectus. Please see "Underwriting."
 
We have agreed not to sell or otherwise dispose of any shares of common stock
during the 180-day period following the date of the prospectus, except we may
issue, and grant options to purchase, shares of common stock under the 1992
Equity Incentive Plan, the 1995 Management Stock Option Plan and the 1999 Equity
Incentive Plan. In addition, we may issue shares of common stock in connection
with any acquisition of another company if the terms of such issuance provide
that such common stock shall not be resold prior to the expiration of the
180-day period referenced in the preceding sentence.
 
REGISTRATION RIGHTS
 
Following this offering, some of our stockholders will have registration rights.
Please see "Description of Capital Stock-- Registration Rights."
 
STOCK OPTIONS AND WARRANTS
 
Options to purchase an aggregate of 3,678,336 shares of our common stock are
outstanding as of February 28, 2001 under our 1992 Equity Incentive Plan, our
1995 Management Stock Option Plan and our 1999 Equity Incentive Plan. Following
this offering, we expect to register the shares underlying these options in a
registration statement that will automatically become effective upon filing.
Accordingly, subject to the exercise of such options, shares included in such
registration statement will be available for sale in the open market immediately
after the 180-day lock-up period expires.
 
In addition, 102,183 shares of common stock issuable upon the exercise of
warrants will be eligible for sale as restricted securities set forth above, one
year after the exercise of these warrants.
 
                                       64

<PAGE>

                                  UNDERWRITING
 
Subject to the terms and conditions of an underwriting agreement dated       ,
2001, the underwriters named below, who are represented by U.S. Bancorp Piper
Jaffray Inc., CIBC World Markets Corp., and SG Cowen Securities Corporation have
severally and not jointly agreed to purchase from us, the following respective
number of shares of our common stock at a public offering price less the
underwriting discounts and commissions set forth on the cover page of this
prospectus:
 

<TABLE>
<CAPTION>
                                                              NUMBER OF
UNDERWRITERS                                                   SHARES
------------                                                  ---------
<S>                                                           <C>
U.S. Bancorp Piper Jaffray Inc..............................
CIBC World Markets Corp.....................................
SG Cowen Securities Corporation.............................
                                                              ---------
        Total...............................................
                                                              =========
</TABLE>

 
The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares of common stock offered hereby are subject
to certain conditions precedent and that the underwriters will purchase all
shares of the common stock offered hereby, other than those covered by the
over-allotment option described below, if any of these shares are purchased. In
addition, the underwriting agreement provides that, in the event of a default by
an underwriter, in certain circumstances the purchase commitments of
non-defaulting underwriters may be increased or the underwriting agreement may
be terminated.
 
The underwriters propose to offer the shares of common stock to the public at
the public offering price set forth on the cover page of this prospectus and to
dealers at a price that represents a concession not in excess of $
      per share under the public offering price. The underwriters may allow, and
these dealers may re-allow, a concession of not more than $               per
share to certain other dealers. After the initial public offering,
representatives of the underwriters may change the offering price and other
selling terms.
 
We have granted to the underwriters an option, exercisable not later than 30
days after the date of this prospectus, to purchase up to       additional
shares of common stock at the public offering price, less the underwriting
discounts set forth on the cover page of this prospectus. The underwriters may
exercise such option solely to cover over-allotments, if any, made in connection
with this offering. To the extent that the underwriters exercise this option,
each underwriter will become obligated, subject to conditions, to purchase
approximately the same percentage of additional shares of common stock as the
number of shares of common stock to be purchased by it in the above table bears
to the total number of shares of common stock offered hereby. We will be
obligated, pursuant to the option, to sell these additional shares of common
stock to the underwriters to the extent the option is exercised. If any
additional shares of common stock are purchased, the underwriters will offer the
additional shares on the same terms as those on which the other shares are being
offered.
 
The underwriting fee is equal to the public offering price per share of common
stock less the amount paid by the underwriters to us per share of common stock.
The underwriting fee is currently expected to be approximately   % of the
initial public offering price. We have agreed to pay the underwriters the
following fees, assuming either no exercise or full exercise by the underwriters
of the underwriters' over-allotment option:
 

<TABLE>
<CAPTION>
                                                                             TOTAL FEES
                                                            ---------------------------------------------
                                                             WITHOUT EXERCISE OF    WITH FULL EXERCISE OF
                                            FEE PER SHARE   OVER-ALLOTMENT OPTION   OVER-ALLOTMENT OPTION
                                            -------------   ---------------------   ---------------------
<S>                                         <C>             <C>                     <C>
Fees paid by Omnicell.....................      $                  $                       $
</TABLE>

 
                                       65

<PAGE>
In addition, we estimate that our share of the total expenses of this offering,
excluding underwriting discounts and commissions, will be approximately
$         .
 
We have agreed to indemnify the underwriters against some specified types of
liabilities, including liabilities under the Securities Act, and to contribute
to payments the underwriters may be required to make in respect of any of these
liabilities.
 
Each of our officers and directors, and substantially all of our stockholders
and holders of options and warrants to purchase our stock, have agreed not to
offer, sell, contract to sell or otherwise dispose of, or enter into any
transaction that is designed to, or could be expected to, result in the
disposition of any shares of our common stock or other securities convertible
into or exchangeable or exercisable for shares of our common stock or
derivatives of our common stock owned by these persons prior to this offering or
common stock issuable upon exercise of options or warrants held by these persons
for a period of 180 days after the effective date of the registration statement
of which this prospectus is a part without the prior written consent of U.S.
Bancorp Piper Jaffray. This consent may be given at any time without public
notice. We have entered into a similar agreement with the representatives of the
underwriters. There are no agreements between the representatives and any of our
stockholders or affiliates releasing them from these lock-up agreements prior to
the expiration of the 180-day period.
 
The representatives of the underwriters have advised us that the underwriters do
not intend to confirm sales to any account over which they exercise
discretionary authority.
 
In order to facilitate the offering of our common stock, the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the market
price of our common stock. Specifically, the underwriters may over-allot shares
of our common stock in connection with this offering, thus creating a short
position in our common stock for their own account. A short position results
when an underwriter sells more shares of common stock than that underwriter is
committed to purchase. Additionally, to cover these over-allotments or to
stabilize the market price of our common stock, the underwriters may bid for,
and purchase, shares of our common stock in the open market. Finally, the
representatives, on behalf of the underwriters, may also reclaim selling
concessions allowed to an underwriter or dealer if the underwriting syndicate
repurchases shares distributed by that underwriter or dealer. Any of these
activities may maintain the market price of our common stock at a level above
that which might otherwise prevail in the open market. These transactions may be
effected on the Nasdaq National Market or otherwise. The underwriters are not
required to engage in these activities and, if commenced, may end any of these
activities at any time.
 
At our request, the underwriters have reserved for sale, at the initial public
offering price, up to       shares or   % of our common stock being sold in this
offering for our vendors, employees, family members of employees, customers and
other third parties. The number of shares of our common stock available for sale
to the general public will be reduced to the extent these reserved shares are
purchased. Any reserved shares that are not purchased by these persons will be
offered by the underwriters to the general public on the same basis as the other
shares in this offering.
 
PRICING OF THE OFFERING
 
Prior to this offering, there has been no public market for our common stock.
Consequently, the initial public offering price for our common stock has been
determined by negotiations among us and the representatives of the underwriters.
Among the primary factors considered in determining the initial public offering
price were:
 
    - prevailing market conditions;
 
    - our results of operations in recent periods;
 
    - the present stage of our development;
 
                                       66

<PAGE>
    - the market capitalization and stage of development of the other companies
      that we and the representatives of the underwriters believe to be
      comparable to our business; and
 
    - estimates of our business potential.
 

                                 LEGAL MATTERS
 
The validity of the shares of common stock offered hereby will be passed upon
for us by Cooley Godward LLP, Palo Alto, California. Certain legal matters in
connection with this offering will be passed upon for the underwriters by
Preston Gates & Ellis LLP, Seattle, Washington.
 

                                    EXPERTS
 
Ernst & Young LLP, independent auditors, have audited our consolidated financial
statements at December 31, 1999 and 2000, and for each of the three years in the
period ended December 31, 2000, as set forth in their report. We've included our
financial statements in this prospectus and elsewhere in the registration
statement in reliance on Ernst & Young LLP's report, given on their authority as
experts in auditing and accounting.
 
The financial statements of the Sure-Med Division of Baxter Healthcare
Corporation, an indirect division of Baxter International Inc., as of
December 31, 1998 and for the year ended December 31, 1998 included in this
prospectus have been so included in reliance on the report (which report
contains an explanatory paragraph relating to the restatement of the financial
results as described in Note 2 to the financial statements) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
 
                                       67

<PAGE>
                      WHERE YOU CAN FIND MORE INFORMATION
 
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to the common stock.
For further information regarding us and our common stock, please refer to the
registration statement and exhibits and schedules filed as part of the
registration statement. Each statement in this prospectus referring to a
contract, agreement or other document filed as an exhibit to the registration
statement is qualified in all respects by the filed exhibit.
 
You may read and copy all or any portion of the registration statement or any
other information that we file at the Securities and Exchange Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the Securities and Exchange Commission at 1-800-SEC-0330
for further information on the operation of the public reference room. Our
Securities and Exchange Commission filings, including the registration
statement, are also available to you on the Securities and Exchange Commission's
Web site located at WWW.SEC.GOV.
 
Upon completion of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, as amended, and
in accordance therewith, will file periodic reports, proxy statements and other
information with the SEC.
 
We intend to provide our stockholders with annual reports containing financial
statements audited by an independent public accounting firm and to make
available to our stockholders quarterly reports containing unaudited financial
data for the first three quarters of each year.
 
                                       68

<PAGE>
                                 OMNICELL, INC.
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 

<TABLE>
<S>                                                           <C>
Omnicell, Inc.
  Report of Ernst & Young LLP, Independent Auditors.........   F-2
 
  Consolidated Balance Sheets as of December 31, 1999 and
    2000....................................................   F-3
 
  Consolidated Statements of Operations for the years ended
    December 31, 1998, 1999 and 2000........................   F-4
 
  Consolidated Statement of Redeemable Convertible Preferred
    Stock and Stockholders' Equity (Net Capital Deficiency)
    for the years ended December 31, 1998, 1999 and 2000....   F-5
 
  Consolidated Statements of Cash Flows for the years ended
    December 31, 1998, 1999 and 2000........................   F-6
 
  Notes to Consolidated Financial Statements................   F-8
 
Sure-Med Division of Baxter Healthcare Corporation
 
  Report of PricewaterhouseCoopers LLP, Independent
    Accountants.............................................  F-29
 
  Balance Sheet as of December 31, 1998.....................  F-30
 
  Statement of Operations for the year ended December 31,
    1998....................................................  F-31
 
  Statement of Cash Flows for the year ended December 31,
    1998....................................................  F-32
 
  Notes to Financial Statements.............................  F-33
</TABLE>

 
                                      F-1

<PAGE>

               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders
Omnicell, Inc.
 
We have audited the accompanying consolidated balance sheets of Omnicell, Inc.
as of December 31, 1999 and 2000, and the related consolidated statements of
operations, redeemable convertible preferred stock and stockholders' equity (net
capital deficiency), and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
 
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Omnicell, Inc. at
December 31, 1999 and 2000, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States.
 
As discussed in Note 18 to the consolidated financial statements, the
consolidated statements of operations, redeemable convertible preferred stock
and stockholders' equity (net capital deficiency), and cash flows for each of
the two years in the period ended December 31, 1999 have been restated.
 
                                          Ernst & Young LLP
 
San Jose, California
February 26, 2001,

except for Note 19, as to which the date is
      , 2001
 
--------------------------------------------------------------------------------
 
The foregoing report is in the form that will be signed upon completion of the
name change and reverse stock split described in Notes 1 and 19 to the
consolidated financial statements.
 
                                          /s/ Ernst & Young LLP
 
San Jose, California
March 14, 2001
 
                                      F-2

<PAGE>
                                 OMNICELL, INC.
 
                          CONSOLIDATED BALANCE SHEETS
 
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
 

<TABLE>
<CAPTION>
                                                                                       PRO FORMA AT
                                                                   DECEMBER 31,        DECEMBER 31,
                                                              ----------------------   -------------
                                                                1999        2000           2000
                                                              --------   -----------   -------------
                                                                                        (Unaudited)
<S>                                                           <C>        <C>           <C>
                           ASSETS
Current assets:
  Cash and cash equivalents.................................  $  2,546    $  9,681       $  2,096
  Short-term investments....................................     4,152       2,286          2,286
  Accounts receivable, net of allowance for doubtful
    accounts of $338 in 1999 and $372 in 2000...............     9,685      11,036         11,036
  Inventories...............................................     9,324      10,414         10,414
  Prepaid expenses and other current assets.................     1,909       2,728          2,728
                                                              --------    --------       --------
    Total current assets....................................    27,616      36,145         28,560
                                                              --------    --------
 
Property and equipment, net.................................     7,241       4,913          4,913
Intangible assets...........................................       274          --             --
Other assets................................................     1,986       2,847          2,847
                                                              --------    --------       --------
      Total assets..........................................  $ 37,117    $ 43,905       $ 36,320
                                                              ========    ========       ========
  LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
        STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
Current liabilities:
  Accounts payable..........................................  $  2,234    $  4,416       $  4,416
  Accrued liabilities.......................................    17,299      16,065         16,065
  Deferred revenue..........................................     2,268       3,233          3,233
  Deferred gross profit.....................................    28,167      29,898         29,898
  Current portion of notes payable..........................        51          37             37
                                                              --------    --------       --------
    Total current liabilities...............................    50,019      53,649         53,649
 
Notes payable...............................................     8,440       8,376            112
Other long-term liabilities.................................       812         842            842
Commitments and contingencies
Redeemable convertible preferred stock, no par value;
  1,802,000 shares designated; 1,081,200 and 720,800 shares
  issued and outstanding at December 31, 1999 and 2000,
  respectively (no shares pro forma) (liquidation preference
  of $10,113 at December 31, 2000)..........................    15,166      10,113             --
Stockholders' equity (net capital deficiency):
  Convertible preferred stock, no par value; 18,500,000
    shares authorized (5,000,000 shares authorized pro
    forma), including 1,802,000 shares designated as
    redeemable convertible preferred stock (11,527,848 and
    14,538,376 shares issued and outstanding at
    December 31, 1999 and 2000, respectively)(no shares pro
    forma) (liquidation preference of $63,747 at
    December 31, 2000)......................................    33,854      62,392             --
  Common stock, no par value; 35,000,000 shares authorized
    (50,000,000 shares authorized pro forma); 1,646,382 and
    3,080,140 shares issued and outstanding at December 31,
    1999 and 2000, respectively (14,796,082 shares pro
    forma)..................................................     2,302       9,137         82,321
  Notes receivable from stockholders........................        --      (4,578)        (4,578)

  Accumulated deficit.......................................   (73,478)    (96,030)       (96,030)
  Accumulated other comprehensive income....................         2           4              4
                                                              --------    --------       --------
    Total stockholders' equity (net capital deficiency).....   (37,320)    (29,075)       (18,283)
                                                              --------    --------       --------
      Total liabilities, redeemable convertible preferred
       stock, and stockholders' equity (net capital
       deficiency)..........................................  $ 37,117    $ 43,905       $ 36,320
                                                              ========    ========       ========
</TABLE>

 
                            See accompanying notes.
 
                                      F-3

<PAGE>
                                 OMNICELL, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
REVENUES:
Product revenues............................................  $34,690    $ 42,184   $ 55,303
Product revenues from related party.........................    9,398       4,163      1,097
Service and other revenues..................................    4,124       7,034      7,810
                                                              -------    --------   --------
    Total revenues..........................................   48,212      53,381     64,210
Cost of product revenues....................................   16,343      28,503     18,280
Cost of service and other revenues..........................    1,801       5,377      7,722
                                                              -------    --------   --------
    Total cost of revenues..................................   18,144      33,880     26,002
                                                              -------    --------   --------
Gross profit................................................   30,068      19,501     38,208
 
Operating expenses:
  Research and development..................................    5,987       8,745     11,276
  Selling, general, and administrative......................   24,292      35,797     45,320
  Integration...............................................       --         785         --
  Restructuring.............................................       --          --      2,908
                                                              -------    --------   --------
    Total operating expenses................................   30,279      45,327     59,504
                                                              -------    --------   --------
Loss from operations........................................     (211)    (25,826)   (21,296)
Interest income.............................................    1,039         704      1,053
Interest expense............................................       --      (2,471)    (2,209)
                                                              -------    --------   --------
Income (loss) before provision for income taxes.............      828     (27,593)   (22,452)
Provision for income taxes..................................      185         149        100
                                                              -------    --------   --------
Net income (loss)...........................................      643     (27,742)   (22,552)
Preferred stock accretion...................................      (22)         --         --
                                                              -------    --------   --------
Net income (loss) applicable to common
  stockholders..............................................  $   621    $(27,742)  $(22,552)
                                                              =======    ========   ========
Net income (loss) per common share:
  Basic.....................................................  $  0.48    $ (18.86)  $ (13.23)
  Diluted...................................................  $  0.06    $ (18.86)  $ (13.23)
  Pro forma basic and diluted (unaudited)...................                        $  (1.57)
Weighted average common shares outstanding:
  Basic.....................................................    1,302       1,471      1,704
  Diluted...................................................   11,013       1,471      1,704
  Pro forma basic and diluted (unaudited)...................                          14,403
</TABLE>

 
                            See accompanying notes.
 
                                      F-4

<PAGE>
                                 OMNICELL, INC.
      CONSOLIDATED STATEMENT OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
                 STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                   REDEEMABLE
                                                                   CONVERTIBLE             CONVERTIBLE
                                                                 PREFERRED STOCK         PREFERRED STOCK
                                                              ---------------------   ---------------------
                                                                SHARES      AMOUNT      SHARES      AMOUNT
                                                              ----------   --------   ----------   --------
<S>                                                           <C>          <C>        <C>          <C>
Balance at December 31, 1997................................   1,802,000   $ 25,260   11,527,848   $33,854
  Net income................................................          --         --           --        --
  Change in unrealized loss on short-term investments.......          --         --           --        --
  Total comprehensive income................................
  Exercise of stock options.................................          --         --           --        --
  Employee stock purchase plan..............................          --         --           --        --
  Amortization of deferred compensation.....................          --         --           --        --
  Accretion of redeemable convertible preferred stock.......          --         22           --        --
                                                              ----------   --------   ----------   -------
Balance at December 31, 1998................................   1,802,000     25,282   11,527,848    33,854
  Net loss..................................................          --         --           --        --
  Change in unrealized loss on short-term investments.......          --         --           --        --
  Total comprehensive loss..................................          --         --           --        --
  Exercise of stock options.................................          --         --           --        --
  Employee stock purchase plan..............................          --         --           --        --
  Amortization of deferred compensation.....................          --         --           --        --
  Redemption of redeemable convertible preferred stock......    (720,800)   (10,116)          --        --
                                                              ----------   --------   ----------   -------
Balance at December 31, 1999................................   1,081,200     15,166   11,527,848    33,854
  Net loss..................................................          --         --           --        --
  Change in unrealized gain on short-term investments.......          --         --           --        --
  Total comprehensive loss..................................          --         --           --        --
  Modification of stock option awards.......................          --         --           --        --
  Issuance of Series K convertible preferred stock for cash
    (less issuance costs of $62)............................          --         --    3,010,528    28,538
  Exercise of stock options.................................          --         --           --        --
  Employee stock purchase plan..............................          --         --           --        --
  Issuance of stockholder notes receivable..................          --         --           --        --
  Issuance of warrant in connection with bank credit
    facility................................................          --         --           --        --
  Redemption of redeemable convertible preferred stock......    (360,400)    (5,053)          --        --
                                                              ----------   --------   ----------   -------
Balance at December 31, 2000................................     720,800   $ 10,113   14,538,376   $62,392
                                                              ==========   ========   ==========   =======
 
<CAPTION>
 
                                                                                          NOTES
                                                                   COMMON STOCK         RECEIVABLE
                                                              ----------------------       FROM       DEFERRED STOCK   ACCUMULATED
                                                               SHARES       AMOUNT     STOCKHOLDERS    COMPENSATION      DEFICIT
                                                              ---------   ----------   ------------   --------------   ------------
<S>                                                           <C>         <C>          <C>            <C>              <C>
Balance at December 31, 1997................................  1,281,804   $      807     $    --         $   (28)        $(46,357)
  Net income................................................         --           --          --              --              643
  Change in unrealized loss on short-term investments.......         --           --          --              --               --
 
  Total comprehensive income................................
 
  Exercise of stock options.................................     48,923          135          --              --               --
  Employee stock purchase plan..............................     54,506          482          --              --               --
  Amortization of deferred compensation.....................         --           --          --              17               --
  Accretion of redeemable convertible preferred stock.......         --           --          --              --              (22)
                                                              ---------   ----------     -------         -------         --------
Balance at December 31, 1998................................  1,385,233        1,424          --             (11)         (45,736)
  Net loss..................................................         --           --          --              --          (27,742)
  Change in unrealized loss on short-term investments.......         --           --          --              --               --
 
  Total comprehensive loss..................................         --           --          --              --               --
 
  Exercise of stock options.................................    200,360          341          --              --               --
  Employee stock purchase plan..............................     60,789          537          --              --               --
  Amortization of deferred compensation.....................         --           --          --              11               --
  Redemption of redeemable convertible preferred stock......         --           --          --              --               --
                                                              ---------   ----------     -------         -------         --------
Balance at December 31, 1999................................  1,646,382        2,302          --              --          (73,478)
  Net loss..................................................         --           --          --              --          (22,552)
  Change in unrealized gain on short-term investments.......         --           --          --              --               --
 
  Total comprehensive loss..................................         --           --          --              --               --
 
  Modification of stock option awards.......................         --          728          --              --               --
  Issuance of Series K convertible preferred stock for cash
    (less issuance costs of $62)............................         --           --          --              --               --
  Exercise of stock options.................................  1,251,919        5,146          --              --               --
  Employee stock purchase plan..............................    181,839          883          --              --               --
  Issuance of stockholder notes receivable..................         --           --      (4,578)             --               --
  Issuance of warrant in connection with bank credit
    facility................................................         --           78          --              --               --
  Redemption of redeemable convertible preferred stock......         --           --          --              --               --
                                                              ---------   ----------     -------         -------         --------
Balance at December 31, 2000................................  3,080,140   $    9,137     $(4,578)        $    --         $(96,030)
                                                              =========   ==========     =======         =======         ========
 
<CAPTION>
                                                                                   TOTAL
                                                               ACCUMULATED     STOCKHOLDERS'
                                                                  OTHER           EQUITY
                                                              COMPREHENSIVE    (NET CAPITAL
                                                              INCOME (LOSS)     DEFICIENCY)
                                                              --------------   -------------
<S>                                                           <C>              <C>
Balance at December 31, 1997................................      $  (6)         $(11,730)
  Net income................................................         --               643
  Change in unrealized loss on short-term investments.......          4                 4
                                                                                 --------
  Total comprehensive income................................                          647
                                                                                 --------
  Exercise of stock options.................................         --               135
  Employee stock purchase plan..............................         --               482
  Amortization of deferred compensation.....................         --                17
  Accretion of redeemable convertible preferred stock.......         --               (22)
                                                                  -----          --------
Balance at December 31, 1998................................         (2)          (10,471)
  Net loss..................................................         --           (27,742)
  Change in unrealized loss on short-term investments.......          4                 4
                                                                                 --------
  Total comprehensive loss..................................         --           (27,738)
                                                                                 --------
  Exercise of stock options.................................         --               341
  Employee stock purchase plan..............................         --               537
  Amortization of deferred compensation.....................         --                11
  Redemption of redeemable convertible preferred stock......         --                --
                                                                  -----          --------
Balance at December 31, 1999................................          2           (37,320)
  Net loss..................................................         --           (22,552)
  Change in unrealized gain on short-term investments.......          2                 2
                                                                                 --------
  Total comprehensive loss..................................         --           (22,550)
                                                                                 --------
  Modification of stock option awards.......................         --               728
  Issuance of Series K convertible preferred stock for cash
    (less issuance costs of $62)............................         --            28,538
  Exercise of stock options.................................         --             5,146
  Employee stock purchase plan..............................         --               883
  Issuance of stockholder notes receivable..................         --            (4,578)
  Issuance of warrant in connection with bank credit
    facility................................................         --                78
  Redemption of redeemable convertible preferred stock......         --                --
                                                                  -----          --------
Balance at December 31, 2000................................      $   4          $(29,075)
                                                                  =====          ========
</TABLE>

 
                            See accompanying notes.
 
                                      F-5

<PAGE>
                                 OMNICELL, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
OPERATING ACTIVITIES
  Net income (loss).........................................  $    643   $(27,742)  $(22,552)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
    Depreciation............................................     1,375      1,894      2,749
    Amortization............................................        --         90         90
    Loss on disposal of capital equipment...................        45          4         --
    Deferred rent...........................................       (50)       (63)       226
    Amortization of deferred compensation...................        17         11         --
    Stock compensation......................................        --         --        728
    Write-off of Sure-Med inventory.........................        --      9,722         --
    Write-off of ADDS investment............................        --        550         --
    Write-off of intangible assets..........................        --         --        182
    Changes in assets and liabilities:
      Accounts receivable...................................     2,066       (453)    (1,351)
      Inventories...........................................      (378)     1,978     (1,090)
      Prepaid expenses and other current assets.............    (1,228)      (741)      (741)
      Other assets..........................................      (405)       588       (769)
      Accounts payable......................................      (345)     1,608      2,182
      Accrued liabilities...................................       208        971     (1,234)
      Deferred revenue......................................       747        313        965
      Deferred gross profit.................................     4,005      7,426      1,731
      Other liabilities.....................................        --     (1,149)      (224)
                                                              --------   --------   --------
    Net cash provided by (used in) operating activities.....     6,700     (4,993)   (19,108)
                                                              --------   --------   --------
 
INVESTING ACTIVITIES
  Cash paid for Sure-Med acquisition, net of cash
    received................................................        --       (352)        --
  Purchases of short-term investments.......................   (11,517)    (4,153)    (4,055)
  Maturities of short-term investments......................     6,011     10,504      5,921
  Capital expenditures......................................    (1,785)    (6,199)      (511)
                                                              --------   --------   --------
    Net cash provided by (used in) investing activities.....    (7,291)      (200)     1,355
                                                              --------   --------   --------
 
FINANCING ACTIVITIES
  Proceeds from issuance of common stock....................       617        878      1,453
  Proceeds from issuance of Series K preferred stock........        --         --     28,538
  Redemption of redeemable convertible preferred stock......        --     (5,058)    (5,053)
  Issuance of convertible promissory note...................        --        350         --
  Payment of principle on long-term debt....................        --         --        (50)
                                                              --------   --------   --------
    Net cash provided by (used in) financing activities.....       617     (3,830)    24,888
                                                              --------   --------   --------
Net increase (decrease) in cash and cash equivalents........        26     (9,023)     7,135
Cash and cash equivalents at beginning of period............    11,543     11,569      2,546
                                                              --------   --------   --------
Cash and cash equivalents at end of period..................  $ 11,569   $  2,546   $  9,681
                                                              ========   ========   ========
</TABLE>

 
                            See accompanying notes.
 
                                      F-6

<PAGE>
                                 OMNICELL, INC.
 
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING AND INVESTING
  ACTIVITIES
Issuance of note payable in Sure-Med acquisition............  $     --   $  7,914   $     --
Change in unrealized gain (loss) on short-term
  investments...............................................        (4)        (4)         2
Issuance of note payable for leasehold improvements to
  landlord..................................................        --        200         --
Accretion of redeemable convertible preferred stock.........        22         --         --
Redemption of preferred stock offset with receivables.......        --      5,750        553
Issuance of stock purchase warrant..........................        --         --         78
Issuance of notes receivable from stockholders to exercise
  stock options.............................................        --         --     (4,578)
 
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest......................................  $     --   $  2,312   $  1,800
</TABLE>

 
                            See accompanying notes.
 
                                      F-7

<PAGE>
                                 OMNICELL, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
DESCRIPTION OF THE COMPANY
 
The Company was incorporated in the State of California in September 1992 under
the name OmniCell Technologies, Inc. In September 1999, the Company changed its
name to Omnicell.com and intends to reincorporate in Delaware and change its
name to Omnicell, Inc. in April 2001. All references in these financial
statements will be to "Omnicell, Inc." or the "Company."
 
The Company provides an integrated suite of clinical infrastructure and workflow
automation solutions for healthcare facilities. These solutions include
automation systems, clinical reference tools, an Internet-based procurement
application and decision support capabilities. The Company sells and leases its
products and related services to a wide range of healthcare facilities such as
hospitals, integrated delivery networks and alternate care facilities, which
include nursing homes, outpatient surgery centers, catherization labs and
clinics.
 
PRINCIPLES OF CONSOLIDATION
 
The consolidated financial statements include the Company and its wholly owned
subsidiaries, Omnicell HealthCare Canada, Inc. and Omnicell Europe SARL. All
significant intercompany accounts and transactions are eliminated in
consolidation.
 
USE OF ESTIMATES
 
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that materially affect the amounts
reported in the consolidated financial statements. Actual results could differ
from these estimates.
 
REVENUE RECOGNITION
 
Revenues are derived primarily from sales of pharmacy and supply systems and
subsequent service agreements. The Company markets these systems for sale or for
lease. Pharmacy and supply system sales, which are accounted for in accordance
with American Institute of Certified Public Accountant's Statement of
Position 97-2 (SOP 97-2), "Software Revenue Recognition," are recognized upon
completion of Omnicell's installation obligation at the customer's site.
Revenues from leasing arrangements are recognized in accordance with Statement
of Financial Accounting Standards (SFAS) No. 13, "Accounting for Leases," upon
completion of the Company's installation obligation and commencement of the
noncancelable lease term. Post-installation technical support, such as phone
support, on-site service, parts and access to software upgrades, is provided by
the Company under separate annual service agreements. Revenues on service
agreements are recognized ratably over the related service contract period.
Deferred revenue represents amounts received under service agreements for which
the services have not yet been performed. Deferred gross profit represents the
profit to be earned by the Company, exclusive of installation costs, on pharmacy
and supply systems sales for which customer acceptance has occurred but the
Company's installation obligation has not yet been fulfilled. Installation costs
are recorded to cost of goods sold when incurred.
 
Revenues from the Company's Internet-based procurement application, introduced
in 1999, are recognized ratably over the subscription period. Internet-based
procurement application revenues were
 
                                      F-8

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
not significant in the years ended December 31, 1999 and 2000, and are included
in service and other revenues.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The Company has determined the estimated fair value of financial instruments.
The amounts reported for cash and cash equivalents, accounts receivable, notes
receivable from stockholders, accounts payable, and accrued expenses approximate
fair value because of their short maturities. Short-term investments are
reported at their estimated fair value based on quoted market prices of
comparable instruments. Based on borrowing rates currently available to the
Company for loans with similar terms, the carrying value of its debt obligations
approximates fair value.
 
CASH EQUIVALENTS
 
The Company considers all highly liquid debt instruments with original
maturities of 90 days or less to be cash equivalents.
 
CONCENTRATIONS OF CREDIT RISK AND SIGNIFICANT CUSTOMERS
 
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash equivalents, investments, accounts
receivable and notes receivable from stockholders. Cash equivalents consist
primarily of money market funds and commercial debt securities and are held
primarily with two financial institutions. By policy, the Company limits the
amounts invested in any type of instrument for investments other than U.S.
government treasury instruments. The Company places its investments for
safekeeping with an insured creditworthy financial institution.
 
The Company sells and leases its products and services primarily to hospitals
and other healthcare facilities throughout the United States. The majority of
leases originated by the Company are sold to unaffiliated finance companies (see
Note 3). To date, the Company has had no significant credit losses.
 
One customer accounted for 20.5% of revenues in 1998. No one customer accounted
for over 10.0% of revenues in 1999 or 2000.
 
One customer accounted for 11.0% of accounts receivable at December 31, 1999. A
different customer accounted for 11.0% of accounts receivable at December 31,
2000.
 
The majority of net revenues are made to customers in North America totaling 99%
of total net revenues in 1998, 1999 and 2000.
 
SHORT-TERM INVESTMENTS
 
Short-term investments consist primarily of highly liquid debt instruments
purchased with original maturities of greater than 90 days but less than twelve
months. The Company classifies these securities as available-for-sale. The
differences between amortized cost and fair value, representing unrealized
holding gains or losses, are recorded as a separate component of stockholders'
equity until realized. Any gains and losses on the sale of short-term
investments are determined on a specific identification method, and such gains
and losses are reflected as a component of net interest income (expense). The
Company has not experienced any significant gains or losses on its investments
to date.
 
                                      F-9

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
 
Inventories are stated at the lower of cost (utilizing standard costs, which
approximate the first-in, first-out method) or market. The Company routinely
assesses its on-hand inventory for timely identification and measurement of
obsolete, slow-moving, or otherwise impaired inventory.
 
PROPERTY AND EQUIPMENT
 
Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation and amortization are computed using the straight-line
method over the estimated useful lives of the related assets, generally three to
five years. Leasehold improvements are amortized over the shorter of the lease
term or the estimated useful lives of the improvements, generally four to seven
years.
 
IMPAIRMENT OF LONG-LIVED ASSETS
 
The Company evaluates its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may
not be recoverable. Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of any asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.
 
SOFTWARE DEVELOPMENT COSTS
 
Development costs related to software incorporated in the Company's pharmacy and
supply systems incurred subsequent to the establishment of technological
feasibility are capitalized and amortized over the estimated lives of the
related products. Technological feasibility is established upon completion of a
working model. At December 31, 2000, capitalized software development costs are
approximately $900,000. These costs will be amortized over a 3-year period upon
commercial introduction and are reported as a component of other assets. There
were no capitalized software development costs at December 31, 1999.
 
ADVERTISING EXPENSES
 
The Company expenses the costs of advertising as incurred. Advertising expenses
for the years ended December 31, 1998, 1999 and 2000 were approximately $11,000,
$628,000 and $1.2 million, respectively.
 
INTEGRATION EXPENSES
 
Integration expenses relate to expenses incurred to integrate the Sure-Med
product line (see Note 2) into the Company's operations. These expenses include
charges for employee severance costs, travel, training and relocation expenses.
 
STOCK-BASED COMPENSATION
 
Under SFAS No. 123, "Accounting for Stock-Based Compensation," the Company
accounts for stock-based awards to employees using the intrinsic value method
established by Accounting Principles Board
 
                                      F-10

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees." Thus, no
compensation expense is recognized for options granted with exercise prices
equal to the fair value of the Company's common stock on the date of grant.
 
INCOME TAXES
 
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." This statement prescribes the use of the
liability method whereby deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities, and are measured using enacted tax rates and laws that will be in
effect when the differences are expected to reverse.
 
COMPREHENSIVE INCOME
 
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income," which establishes standards for
reporting and displaying comprehensive income and its components in financial
statements. The only items of other comprehensive income (loss) that the Company
currently reports are unrealized gains (losses) on short-term investments, which
are included in other accumulated comprehensive income (loss) in the
consolidated statement of redeemable convertible preferred stock and
stockholders' equity (net capital deficiency).
 
SEGMENT INFORMATION
 
The Company reports segments in accordance with SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 131 requires the
use of a management approach in identifying segments of an enterprise. Prior to
1999, the Company consisted of one operating segment: pharmacy and supply
systems. A second operating segment was created in the second half of 1999 with
the introduction of the Company's e-commerce business. The Company's chief
operating decision maker reviews information pertaining to reportable segments
only to the gross profit level. There are no significant intersegment sales or
transfers. Assets of the operating segments are not segregated and substantially
all of the Company's long-lived assets are located in the United States.
 
For the years ended December 31, 1999 and 2000, substantially all of the
Company's total revenues and gross profit were generated by the pharmacy and
supply systems operating segment. The Internet-based e-commerce business
operating segment generated no revenues in 1999 and less than one percent of
consolidated revenues in 2000. The gross loss generated by the segment was less
than three percent of consolidated gross profit in both 1999 and 2000, excluding
the $2.9 million restructuring charge recorded in 2000.
 
STOCK SPLIT
 
All common stock share and per share amounts have been restated to reflect a
1-for-1.6 reverse stock split.
 
NET INCOME (LOSS) PER SHARE
 
In accordance with SFAS No. 128, "Earnings Per Share," basic net income (loss)
per share is computed by dividing the net income (loss) applicable to common
stockholders for the period by the weighted
 
                                      F-11

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
average number of common shares outstanding during the period, less shares
subject to repurchase. Diluted net income (loss) per share is computed by
dividing the net income (loss) applicable to common stockholders for the period
by the weighted average number of common and common equivalent shares
outstanding during the period. Potentially dilutive securities, composed of
incremental common shares issuable upon the exercise of stock options and
warrants, and common shares issuable on conversion of preferred stock, were
excluded from historical diluted loss per share for the years ended
December 31, 1999 and 2000 because of their anti-dilutive effect. The total
number of shares excluded from the calculations of diluted net loss per share
for the years ended December 31, 1999 and 2000, was 8,404,385 and 12,698,536,
respectively.
 
Under the provisions of SAB No. 98, common shares issued for nominal
consideration, if any, would be included in the per share calculations as if
they were outstanding for all periods presented. No common shares have been
issued for nominal consideration.
 
Pro forma net loss per share has been computed as described above and also gives
effect to common equivalent shares arising from redeemable convertible preferred
stock, convertible preferred stock and a convertible note that will
automatically convert upon the closing of the initial public offering
contemplated by this prospectus using the if-converted method from the original
date of issuance.
 
                                      F-12

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The calculation of historical and pro forma basic and diluted net income (loss)
per common share is as follows:
 

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
                                                                (In thousands, except per
                                                                      share amounts)
<S>                                                           <C>        <C>        <C>
HISTORICAL:
  Basic:
    Net income (loss).......................................  $   643    $(27,742)  $(22,552)
    Preferred stock accretion...............................      (22)         --         --
                                                              -------    --------   --------
    Net income (loss) applicable to common
      stockholders..........................................  $   621    $(27,742)  $(22,552)
                                                              =======    ========   ========
    Weighted average shares of common stock outstanding.....    1,318       1,477      2,267
    Less: Weighted average shares subject to
      repurchase............................................       16           6        563
                                                              -------    --------   --------
    Weighted average shares outstanding--
      basic.................................................    1,302       1,471      1,704
                                                              =======    ========   ========
    Net income (loss) applicable to common shareholders per
      common share..........................................  $  0.48    $ (18.86)  $ (13.23)
                                                              =======    ========   ========
 
  Diluted:
    Net income (loss).......................................  $   643    $(27,742)  $(22,552)
                                                              =======    ========   ========
    Weighted average shares outstanding--
      basic.................................................    1,302       1,471      1,704
    Weighted average number of common shares issuable upon
      the conversion of dilutive preferred shares...........    8,528          --         --
    Effect of dilutive securities--stock options............    1,183          --         --
                                                              -------    --------   --------
    Diluted weighted average number of shares outstanding...   11,013       1,471      1,704
                                                              =======    ========   ========
    Net income (loss) per common share......................  $  0.06    $ (18.86)  $ (13.23)
                                                              =======    ========   ========
 
PRO FORMA BASIC AND DILUTED (UNAUDITED):
  Net loss..................................................                        $(22,552)
                                                                                    ========
  Shares used above.........................................                           1,704
  Adjustment to reflect the weighted average offset of the
    assumed conversion of the convertible note payable, the
    redeemable convertible preferred stock and convertible
    preferred stock.........................................                          12,699
                                                                                    --------
  Weighted average shares used in computing pro forma basic
    and diluted net loss per share..........................                          14,403
                                                                                    ========
  Pro forma basic and diluted net loss per common share.....                        $  (1.57)
                                                                                    ========
</TABLE>

 
UNAUDITED PRO FORMA BALANCE SHEET
 
The unaudited pro forma balance sheet information at December 31, 2000 reflects
the assumed conversion of 180,200 shares of redeemable convertible preferred
stock, all of the Company's convertible preferred stock and a convertible note
upon completion of the offering by this prospectus. The unaudited pro forma
balance sheet also reflects the assumed redemption of 540,600 shares of
redeemable convertible preferred stock at a price of $14.03 per share.
 
                                      F-13

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENTLY ISSUED ACCOUNTING STANDARDS
 
In March 2000, the Emerging Issues Task Force (EITF) published its consensus on
Issue No. 00-2, "Accounting for Web Site Development Costs." This EITF sets
forth guidance on whether to capitalize or expense certain development costs.
The Company has adopted EITF 00-2 effective January 1, 2000 and capitalized
$260,000 of Web site development costs in the year ended December 31, 2000.
These costs were written off as a part of the 2000 restructuring activities.
 
In March, 2000, the FASB issued Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation," an interpretation of APB No. 25. The
Interpretation is applied prospectively to all new awards, modifications to
outstanding awards, and changes in employee status after July 1, 2000, with the
exception of the definition of employee and stock option repricings as to which
the effective date is December 15, 1998. The adoption of this Interpretation did
not have a significant effect on the Company's results of operations or
financial condition.
 
In December 1999, the Securities and Exchange Commission issued SAB No. 101,
"Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on
the recognition, presentation and disclosure of revenue in financial statements.
The Company has adopted SAB No. 101 for all periods presented.
 
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and No. 138,
which is effective for years beginning after June 15, 2000. SFAS No. 133, as
amended, will require the Company to recognize all derivatives on the balance
sheet at fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for depending on the use of the derivative
and whether it qualifies for hedge accounting. SFAS No. 133 will be effective
for the Company's financial statements for the year ended December 31, 2001.
Management believes that this statement will not have a significant effect on
the Company's results of operations or financial condition.
 
NOTE 2.  SURE-MED ACQUISITION
 
Effective January 29, 1999, the Company acquired substantially all of the assets
together with certain specified liabilities and obligations of the Sure-Med
product line of Baxter Healthcare in a transaction accounted for as a purchase.
Baxter Healthcare designed, marketed and sold Sure-Med pharmacy systems to
hospitals and other healthcare facilities. The consolidated financial statements
include the operating results of Sure-Med from the date of acquisition.
 
The original purchase price of $15.1 million consisted of a cash payment of $2.0
million to Baxter Healthcare, a promissory note of $12.7 million, and $400,000
of related acquisition expenses. In December 1999, the purchase price was
adjusted downward by $6.4 million through a $1.6 million cash payment from
Baxter Healthcare to the Company and a $4.8 million reduction in the note
payable to Baxter Healthcare. The Company is obligated to repay the principal
amount of the promissory note in eight quarterly installments, commencing on
March 31, 2002, or earlier upon the closing of an initial public offering. The
promissory note bears interest at a rate of 8.0%. Interest is payable quarterly,
commencing on March 31, 1999. Upon the sale or issuance by Omnicell of any
shares of capital stock, excluding sales or issuances of common stock or options
under the Company's stock option and stock purchase plans and private placements
in any single year not exceeding 10.0% of its outstanding paid-in capital, the
Company is required to prepay the outstanding principal amount of the promissory
note
 
                                      F-14

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 2.  SURE-MED ACQUISITION (CONTINUED)
plus accrued interest to the extent of 50.0% of the net proceeds of such equity
issuance. There is an exception that allows up to $30 million of financing
raised during 2000 to be excluded as long as 50.0% of the proceeds shall be
applied to redeeming the Series J preferred stock. See Note 14.
 
The purchase price consideration was allocated to the acquired assets and
assumed liabilities based on fair values as follows (in thousands):
 

<TABLE>
<S>                                                           <C>
Inventories.................................................  $16,098
Other assets, primarily residual value of leased systems....    1,820
Identifiable intangible assets..............................      366
Liabilities.................................................   (9,618)
                                                              -------
Total purchase consideration................................  $ 8,666
                                                              =======
</TABLE>

 
Pro forma results of operations, as if the transaction had occurred on January
1, 1999, are not presented as they would not be materially different than actual
1999 results. Pro forma results of operations, as if the transaction had
occurred on January 1, 1998, are as follows (in thousands):
 

<TABLE>
<S>                                                           <C>
Revenue.....................................................  $ 65,590
Net loss....................................................  $(19,867)
Net loss per share..........................................  $ (15.26)
</TABLE>

 
In the fourth quarter of 1999, after sales of the Sure-Med pharmacy systems were
determined to be substantially below original forecasts, the Company recorded a
$9.7 million charge to cost of revenues to reflect a writedown of Sure-Med
product line inventory to estimated net realizable value. In 1999, the Company
also recorded $785,000 of integration expenses associated with the integration
of the Company and Sure-Med engineering efforts, product lines, and marketing
efforts.
 
The Sure-Med acquisition was entered into with the expectation that significant
sales would be generated in 1999 and 2000. The actual sales for 1999 and 2000
were substantially below the levels anticipated in the Company's forecasts.
Product integration issues hindered the Company's sales force in its attempt to
sell the Sure-Med pharmacy systems. As a result, during the third quarter of
fiscal 2000, the Company significantly reduced its Sure-Med pharmacy systems
sales and marketing efforts. It also performed a SFAS 121 impairment analysis on
the remaining Sure-Med intangible assets and concluded that, based on estimated
negative future cash flows, the $182,000 net balance of its intangible assets
was impaired and was therefore written-off to expense.
 
NOTE 3.  LEASING ARRANGEMENTS
 
In addition to direct sales, the Company leases its systems to customers under
sales-type leases, which generally have terms of five years. The Company has
entered into agreements with four finance companies whereby, concurrent with the
customer lease transaction, lease receivables are sold to the finance companies.
Under these agreements, the Company is subject to recourse only in the event of
the Company's breach or nonperformance.
 
                                      F-15

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 3.  LEASING ARRANGEMENTS (CONTINUED)
 
In 1999 and 2000, net sales-type lease receivables sold under these agreements
totaled approximately $22.3 million and $20.7 million, respectively. The Company
records revenue at an amount equal to the cash to be received from the leasing
company, which is equivalent to the net present value of the lease streams,
utilizing the implicit interest rate under its funding agreements. At December
31, 1999 and 2000, accounts receivable included approximately $2.7 million and
$1.5 million, respectively, due from the finance companies for lease receivables
sold.
 
NOTE 4.  SHORT-TERM INVESTMENTS
 
Short-term investments consist of the following (in thousands):
 

<TABLE>
<CAPTION>
                                             AMORTIZED   UNREALIZED GAIN
                                               COST          (LOSS)        FAIR VALUE
                                             ---------   ---------------   ----------
<S>                                          <C>         <C>               <C>
December 31, 1999:
  Certificates of deposits.................   $2,000        $      --        $2,000
  U.S. commercial debt securities..........    2,150                2         2,152
                                              ------        ---------        ------
                                              $4,150        $       2        $4,152
                                              ======        =========        ======
 
December 31, 2000:
  Certificates of deposits.................   $2,284        $       2        $2,286
                                              ======        =========        ======
</TABLE>

 
All short-term investments at December 31, 2000 mature in 2001.
 
NOTE 5.  INVENTORIES
 
Inventories consist of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                             -------------------
                                                               1999       2000
                                                             --------   --------
<S>                                                          <C>        <C>
Raw materials..............................................   $3,650    $ 4,540
Work-in-process............................................      565        340
Finished goods.............................................    5,109      5,534
                                                              ------    -------
  Total....................................................   $9,324    $10,414
                                                              ======    =======
</TABLE>

 
                                      F-16

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 6.  PROPERTY AND EQUIPMENT
 
Property and equipment consist of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Equipment...................................................  $ 6,642    $ 9,043
Furniture and fixtures......................................      930      1,323
Leasehold improvements......................................    1,120      1,629
Purchased software..........................................    3,592        526
                                                              -------    -------
                                                               12,284     12,521
Accumulated depreciation and amortization...................   (5,043)    (7,608)
                                                              -------    -------
Property and equipment, net.................................  $ 7,241    $ 4,913
                                                              =======    =======
</TABLE>

 
No equipment was leased under capital leases at December 31, 1999 and 2000.
 
In August 1999, the Company completed a software license transaction with
Commerce One, Inc. Purchased software consists primarily of this software
licensed on a perpetual basis to enable customer use of the Company's
Internet-based procurement application. Maintenance and support will be provided
by the licensor at contractual annual rates. The Company will share with the
licensor a portion of the transaction fees collected, if any, from product
manufacturers when purchases are made from healthcare suppliers on the Company's
Internet-based procurement application.
 
In the third quarter of 2000, the Company wrote-off the $2.0 million remaining
balance of the MarketSite software license as part of the restructuring
activities.
 
NOTE 7.  OTHER ASSETS
 
In 1997, the Company provided a loan of $500,000 to a strategic partner that was
in a development stage. The note receivable bore interest at 8.5% and was due in
September 2000. The note receivable was automatically convertible to equity of
the corporation upon the closing of that entity's next financing of at least
$1,000,000 or upon default of payment, based on the unpaid principal balance and
accrued interest divided by the fair value price per share. In December 1998,
upon the closing of a financing by the corporation, the note was converted into
13,052 shares of its Series D convertible preferred stock. At December 31, 1999,
the Company determined that there was a permanent decline in the fair value of
this asset and recorded a valuation allowance of $550,000 against the entire
investment, including accrued interest.
 
                                      F-17

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 8.  ACCRUED LIABILITIES
 
Accrued liabilities consist of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Accrued compensation and related benefits...................  $ 2,224    $ 2,139
Accrued license fees........................................    2,523        119
Accrued upgrade costs.......................................    3,960      5,995
Other accrued liabilities...................................    8,592      7,637
Accrued restructuring costs.................................       --        175
                                                              -------    -------
                                                              $17,299    $16,065
                                                              =======    =======
</TABLE>

 
NOTE 9.  RESTRUCTURING
 
The Company recorded restructuring costs of $2.9 million in the third quarter of
fiscal 2000 in connection with a strategic change in its e-commerce business to
concentrate primarily on its Internet-based procurement application. This
resulted in a workforce reduction of approximately 14 positions. The primary
components of the restructuring charge were $2.0 million related to a purchased
software license, $260,000 related to capitalized software engineering costs,
and $517,000 of employee severance costs. The total cash outlays related to
these charges were $404,000 in 2000. As of December 31, 2000, activities related
to this restructuring were completed.
 
The following table sets forth the restructuring reserve:
 

<TABLE>
<CAPTION>
                                                               SEVERANCE
                                                    ASSETS    AND BENEFITS    OTHER      TOTAL
                                                   --------   ------------   --------   --------
                                                                  (in thousands)
<S>                                                <C>        <C>            <C>        <C>
Restructuring expense............................  $ 2,290       $ 517         $101     $ 2,908
 
  Writedown of assets............................   (2,290)         --          (39)     (2,329)
  Cash expenditures..............................       --        (342)         (62)       (404)
                                                   -------       -----         ----     -------
Balance at December 31, 2000.....................  $    --       $ 175         $ --     $   175
                                                   =======       =====         ====     =======
</TABLE>

 
NOTE 10.  DEFERRED GROSS PROFIT
 
Deferred gross profit consists of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                             1999      2000
                                                            -------   -------
<S>                                                         <C>       <C>
Sales of pharmacy and supply systems, which have been
  accepted but not yet installed..........................  $35,389   $39,672
Cost of sales, excluding installation costs...............   (7,222)   (9,774)
                                                            -------   -------
                                                            $28,167   $29,898
                                                            =======   =======
</TABLE>

 
NOTE 11.  LONG-TERM NOTES PAYABLE
 
In October 1999, the Company executed a convertible promissory note with a
private party for $350,000 with interest accruing at 6.02%. No interest payments
are due until October 1, 2004, the maturity date
 
                                      F-18

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 11.  LONG-TERM NOTES PAYABLE (CONTINUED)
of the note. If the Company closes an initial public offering of its common
stock, the note and accrued interest shall automatically convert to an
equivalent number of shares of the Company's common stock at the initial public
offering price per share.
 
In connection with one of the Company's facilities leases, the landlord has
advanced $200,000 to the Company for leasehold improvements. The Company has
agreed to repay this advance in monthly installments of $4,249. This borrowing
arrangement commenced on July 1, 1999, ends June 30, 2004, and bears interest at
10% per annum.
 
Scheduled debt repayments under the convertible promissory note, facilities
lease advance and Baxter promissory note (Note 2) are as follows:
 

<TABLE>
<S>                                                           <C>
2001........................................................  $   37
2002........................................................   3,998
2003........................................................   4,003
2004........................................................     375
2005 and thereafter.........................................      --
                                                              ------
                                                               8,413
Less: current portion.......................................      37
                                                              ------
                                                              $8,376
                                                              ======
</TABLE>

 
NOTE 12.  CREDIT FACILITY
 
In January 2000, the Company entered into a credit facility with a bank. This
facility, as amended in August 2000, provides the Company with advances of up to
75% of eligible receivables, as defined, up to $10.0 million, and expires on
April 27, 2001. This line of credit bears interest at the prime rate plus 2.25%.
The Company has pledged substantially all of its' assets as collateral for this
line of credit. The credit facility requires the Company to comply with a
tangible net deficit financial covenant and other specified non-financial
covenants. At December 31, 2000, the Company had no borrowings under this credit
facility, was eligible to borrow approximately $4.4 million, and was in
compliance with the covenants.
 
Under the terms of the credit facility, on December 31, 2000 the Company issued
to the bank a warrant to purchase 26,351 shares of its common stock at $9.50 per
share with conversion terms on an initial public offering similar to the
conversion terms for the Series K preferred stock (Note 15). The warrant expires
on December 31, 2005. The warrant will convert to a warrant to purchase 31,249
shares of common stock at $8.00 per share based on the Series K conversion
adjustment and the 1-for-1.6 reverse stock split. This warrant has been valued
at $78,000 using the Black-Scholes valuation method. This amount is included in
other assets and will be amortized through the credit line's expiration date.
 
NOTE 13.  LEASE COMMITMENTS
 
The Company leases its Palo Alto, California and Waukegan, Illinois offices and
manufacturing facilities under noncancelable operating leases. The leases expire
beginning January 2002 through June 2006. The Company has an option to renew the
Palo Alto manufacturing facility lease (expires June 2003) and Waukegan facility
lease (expires June 2006) for an additional five years. Rent expense for all
 
                                      F-19

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 13.  LEASE COMMITMENTS (CONTINUED)
operating leases was $728,000 (net of sublease income of $64,000), $1,629,000
and $2,120,000 (net of sublease income of $286,000) for the years ended
December 31, 1998, 1999 and 2000, respectively.
 
At December 31, 2000, future minimum annual operating lease payments, net of
aggregate future minimum receipts from subleases, were as follows (in
thousands):
 

<TABLE>
<CAPTION>
 
<S>                                                           <C>
2001........................................................   $1,278
2002........................................................    1,451
2003........................................................    1,960
2004........................................................    1,600
2005........................................................      299
Thereafter..................................................      152
                                                               ------
  Total minimum lease payments..............................   $6,740
                                                               ======
</TABLE>

 
NOTE 14.  REDEEMABLE CONVERTIBLE PREFERRED STOCK
 
In June 1996, the Company issued 1,802,000 shares of nonvoting Series I
redeemable convertible preferred stock to Sun Healthcare for $25,227,000 (net of
issuance costs of approximately $60,000) and authorized an equal number of
voting shares of Series J redeemable convertible preferred stock. The Series I
redeemable convertible preferred stock was converted into Series J redeemable
convertible preferred stock on a one-for-one basis in 1996.
 
At any time after December 31, 1998, the holders of the Series J redeemable
convertible preferred stock were entitled to require the Company to redeem for
cash the outstanding shares over 30 months at a per share price equal to the
original issue price (subject to adjustment for events of dilution) plus
interest at 9.5% per annum (accruing beginning on March 8, 1999).
 
In January 1999, Sun Healthcare exercised its right to redeem its 1,802,000
shares of Series J redeemable convertible preferred stock in ten equal quarterly
installments beginning in March 1999. Through December 31, 2000, the Company had
redeemed 1,081,200 shares of Series J redeemable convertible preferred stock
from Sun Healthcare for $15.2 million plus interest of $2.7 million. Cash of
$11.6 million was used to satisfy this redemption, with the balance of
$6.3 million paid by offsetting Sun Healthcare's outstanding accounts receivable
balances. All payments have been made except the two quarterly redemption
payments of $2.5 million each that were due in September 2000 and
December 2000, which the Company was not obligated to make because the Company
did not meet certain balance sheet tests under California law.
 
Sun Healthcare has an accounts receivable balance of approximately $260,000 at
December 31, 2000. In the past the two parties have offset the Omnicell accounts
receivable balance with the redemption payments. At year end, the two parties
had not finalized any offsetting agreement.
 
                                      F-20

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 14.  REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
 
Significant terms of the Series J redeemable convertible preferred stock are as
follows:
 
    - Conversion of the Series J preferred stock is automatic upon completion of
      an initial public offering. In addition to adjustments for events of
      dilution, if the Company completes an initial public offering at a price
      greater than $11.78 per share and less than $13.47 per share, the
      conversion price of the Series J preferred stock will be adjusted to
      $17.72 per share from the original purchase price of $22.4523 (as
      converted per the 1-for-1.6 reverse stock split). If the offering price is
      less than $11.78 per share, the conversion price of the Series J preferred
      stock will be adjusted to $16.8370 per share.
 
    - Series J preferred stock has voting rights equivalent to the number of
      shares of common stock into which it is convertible.
 
    - Dividends may be declared at the discretion of the Board of Directors and
      are noncumulative. To the extent declared, dividends of $1.12 per share,
      per annum for Series J preferred stock must be paid prior to any dividends
      on any other preferred stock or common stock. No such dividends have been
      declared or paid.
 
    - In the event of liquidation, dissolution, or winding up of the Company,
      prior to any other preferred stockholders, Series J stockholders shall
      receive $14.03 per share plus all declared but unpaid dividends. Upon
      completion of this distribution, the holders of the common stock will
      receive a pro rata distribution of any remaining assets of the Company. At
      December 31, 2000, the aggregate liquidation preference for redeemable
      convertible preferred stock was $10,113,000.
 
NOTE 15.  STOCKHOLDERS' EQUITY
 
CONVERTIBLE PREFERRED STOCK
 
During the first quarter of 2000, the Company designated and issued 3,010,528
shares of Series K convertible preferred stock at a price of $9.50 per share
subject to adjustment for events of dilution as described below. Net proceeds
were approximately $28.5 million.
 
Conversion of the Series K convertible preferred stock is automatic upon
completion of an initial public offering in excess of $25 million at an offering
price of not less than $8.00 per share. If the Company completes an initial
public offering at a price less than $33.78 per share, the conversion price of
the Series K convertible preferred stock will adjust to 45% of the initial
public offering price, but in no event will it adjust to less than $8.00 per
share. This means that if this offering is completed at a price less than $17.78
per share, the resulting conversion price of the Series K convertible preferred
stock will be $8.00 per share, and a total of 3,575,000 shares of common stock
will be issued on conversion of such preferred stock exclusive of adjustments
for events of dilution.
 
                                      F-21

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 15.  STOCKHOLDERS' EQUITY (CONTINUED)
At December 31, 1999 and 2000, convertible preferred stock consisted of the
following (in thousands, net of issuance costs):
 

<TABLE>
<CAPTION>
                                           DECEMBER 31, 1999        DECEMBER 31, 2000
                              SHARES     ----------------------   ----------------------
                            DESIGNATED   OUTSTANDING    AMOUNT    OUTSTANDING    AMOUNT
                            ----------   -----------   --------   -----------   --------
<S>                         <C>          <C>           <C>        <C>           <C>
Series A..................       480           480     $   120          480     $   120
Series B..................       321           321         120          321         120
Series C..................     1,700         1,700       1,014        1,700       1,014
Series D..................     1,328         1,310       1,412        1,310       1,412
Series E..................     1,966         1,965       6,458        1,965       6,458
Series F..................     2,000         1,948      11,527        1,948      11,527
Series G..................     1,000            --          --           --          --
Series H..................     4,000         3,804      13,203        3,804      13,203
Series K..................     3,158            --          --        3,011      28,538
                              ------        ------     -------       ------     -------
  Total...................    15,953        11,528     $33,854       14,539     $62,392
                              ======        ======     =======       ======     =======
</TABLE>

 
Significant terms of the convertible preferred stock are as follows:
 
    - Each share of Series A, B, C, D, E, G, H and K preferred stock is
      convertible into one share of common stock, and each share of Series F
      preferred stock is convertible into 1.107 shares of common stock (subject
      to adjustment for events of dilution). Each share will automatically
      convert upon an underwritten public offering of common stock meeting
      specified criteria.
 
    - Each share of convertible preferred stock has voting rights equivalent to
      the number of shares of common stock into which it is convertible. The
      holders of Series E preferred stock, voting together as a class, are
      entitled to elect one director of the Company. The holders of Series H
      preferred stock, voting together as a class, are also entitled to elect
      one director of the Company. The holders of Series K preferred stock,
      voting together as a class, are also entitled to elect one director of the
      Company.
 
    - Dividends may be declared at the discretion of the Board of Directors and
      are noncumulative. To the extent declared, dividends of $0.02, $0.03,
      $0.048, $0.085, $0.265, $0.49, $0.49, $0.29, and $0.76 per share, per
      annum for Series A, B, C, D, E, F, G, H and K preferred stock,
      respectively, must be paid prior to any dividends on common stock. No such
      dividends have been declared or paid.
 
    - In the event of liquidation, dissolution, or winding up of the Company,
      Series A, B, C, D, E, F, G, H and K stockholders shall receive, after
      required distributions to the redeemable convertible preferred
      stockholders, $0.25, $0.375, $0.60, $1.085, $3.30, $6.15, $6.15 and $3.68
      and $9.50 per share, respectively, plus all declared but unpaid dividends.
      Upon completion of this distribution, the holders of the common stock will
      receive a pro rata distribution of any remaining assets of the Company. At
      December 31, 2000, the aggregate liquidation preference for preferred
      stock was $63.7 million.
 
CONVERTIBLE PREFERRED STOCK WARRANTS
 
In connection with a capital lease financing in 1994, the Company issued a
warrant to purchase 18,434 shares of Series D preferred stock at an exercise
price of $1.09 per share (or 11,521 shares of common
 
                                      F-22

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 15.  STOCKHOLDERS' EQUITY (CONTINUED)
stock as converted per the 1-for-1.6 reverse stock split at a price of $1.74 per
share). The warrant expires three years from the effective date of an initial
public offering of the Company's common stock. The value of the warrant was
immaterial.
 
In connection with capital lease financings in 1995, the Company issued warrants
to purchase 8,130, 11,382 and 67,934 shares of Series F, G and H preferred stock
at $6.15, $6.15 and $3.68 per share, respectively (or 5,081, 7,113 and 42,121
shares of common stock as converted per the 1-for-1.6 reverse stock split at
prices of $9.84, $9.84 and $5.89 per share, respectively). The Series F and H
warrants expire three years from the effective date of an initial public
offering of the Company's common stock. The Series G warrant expires five years
from the effective date of an initial public offering of the Company's common
stock. The estimated value of these warrants remaining after amortization was
expensed in June 1996 when the repayments were made for the borrowings.
 
NOTES RECEIVABLE FROM STOCKHOLDERS
 
During 2000, the Company provided all its officers the opportunity to exercise
their options to purchase common stock, both vested and unvested, by entering
into a full-recourse note receivable with Omnicell. As a result, 1,067,663
options were exercised under note receivable arrangements totaling
$4.6 million. These notes bear interest at either 6.2% or 6.71%, compounded
annually, with payment of both principal and interest due in 3 years.
 
Stock options that were exercised prior to vesting have been shown as shares
subject to repurchase and total 549,742 shares.
 
COMMON STOCK
 
At December 31, 2000, 562,696 shares of common stock are subject to repurchase
by the Company at the original issuance price. These repurchase rights generally
expire ratably over periods of three to five years.
 
STOCK OPTION PLANS
 
The Company has reserved 10,410,000 shares of common stock for issuance under
its 1992 Incentive Stock Plan, 1995 Management Option Plan, and 1999 Equity
Incentive Plan (the Plans). Under the Plans, incentive and nonqualified stock
options or rights to purchase common stock may be granted to employees,
directors, and consultants. Incentive options, nonqualified options, and stock
purchase rights must be priced to be at least 100%, 85% and 85%, respectively,
of the common stock's fair value at the date of grant as determined by the Board
of Directors. Options shall become exercisable as determined by the Board of
Directors. Sales of stock under stock purchase rights are made pursuant to
restricted stock purchase agreements.
 
In September 1999, the Board of Directors adopted the 1999 Equity Incentive Plan
(Incentive Plan) for granting of incentive and nonqualified stock options and
rights to purchase common stock to employees, directors, and consultants. Under
the Incentive Plan, 5,000,000 shares of common stock are authorized for
issuance. Further, all unissued stock under the Company's 1992 Incentive Stock
Plan and 1995 Management Stock Option Plan are added to the 5,000,000 shares
reserved.
 
                                      F-23

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 15.  STOCKHOLDERS' EQUITY (CONTINUED)
A summary of stock option activity under the Plans follows (shares in
thousands):
 

<TABLE>
<CAPTION>
                                                     NUMBER OF   WEIGHTED AVERAGE
                                                      SHARES      EXERCISE PRICE
                                                     ---------   ----------------
<S>                                                  <C>         <C>
Outstanding at December 31, 1997...................    2,194          $ 4.27
  Granted..........................................      454           10.40
  Exercised........................................      (49)           2.75
  Canceled.........................................     (110)           8.67
                                                      ------
 
Outstanding at December 31, 1998...................    2,489            5.23
  Granted..........................................    1,203           10.40
  Exercised........................................     (205)           1.12
  Canceled.........................................     (142)           9.89
                                                      ------
 
Outstanding at December 31, 1999...................    3,345            7.10
  Granted..........................................    2,308            5.62
  Exercised........................................   (1,252)           4.11
  Canceled.........................................     (691)          10.06
                                                      ------
 
Outstanding at December 31, 2000...................    3,710            6.62
                                                      ======
</TABLE>

 
Subsequent to December 31, 2000, the Company issued options to employees to
purchase 166,906 shares of its common stock at $5.60 and $6.40 per share.
 
Additional information regarding options outstanding as of December 31, 2000 is
as follows (shares in thousands):
 

<TABLE>
<CAPTION>
                                                      WEIGHTED
                                                      AVERAGE
                                                     REMAINING        WEIGHTED                       WEIGHTED
                                        NUMBER      CONTRACTUAL       AVERAGE         NUMBER         AVERAGE
RANGE OF EXERCISE PRICE               OUTSTANDING   LIFE (YEARS)   EXERCISE PRICE   EXERCISABLE   EXERCISE PRICE
-----------------------               -----------   ------------   --------------   -----------   --------------
<S>                                   <C>           <C>            <C>              <C>           <C>
$0.10 - $1.20......................        584           3.66          $ 0.76            584          $ 0.76
$2.00 - $2.00......................        826           9.67            2.00             15            2.00
$3.20 - $3.20......................         54           8.94            3.20             10            3.20
$6.40 - $6.40......................        263           5.29            6.40            260            6.40
$10.40 - $10.40....................      1,983           8.24           10.40            761           10.40
                                         -----                                         -----
                                         3,710           7.64            6.62          1,630            6.18
                                         =====                                         =====
</TABLE>

 
At December 31, 2000, there were 885,416 shares available for future grant under
the Plans, and options to purchase 1,630,000 shares were exercisable. Upon the
exercise of certain exercisable options, the Company would have the right to
repurchase 3,691,290 shares at the original issuance price. Such a right
generally expires over three to five years.
 
In connection with the grant of certain stock options in December 1995, the
Company recorded deferred compensation of $62,000 for the difference between the
deemed fair value for accounting purposes and the option price. At December 31,
2000, the deferred compensation has been fully amortized. Such deferred
compensation is presented as a reduction to stockholders' equity.
 
                                      F-24

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 15.  STOCKHOLDERS' EQUITY (CONTINUED)
As discussed in Note 1, the Company continues to account for its stock-based
awards using the intrinsic value method in accordance with APB 25 and its
related interpretations. Accordingly, compensation expense has not been
recognized in the consolidated financial statements for employee stock
arrangements except for the difference between the deemed fair value for
accounting purposes and the exercise price of certain stock options as noted
above.
 
For the year ended December 31, 2000, the Company issued options to independent
contractors to purchase 24,063 shares of common stock. The value of the options,
using the Black-Scholes option pricing model, was not significant and the
options were fully vested at issuance.
 
For the year ended December 31, 2000, the Company recorded compensation expense
of approximately $728,000 in connection with granting certain former employees
extended periods (beyond the period specified by the Plans) to exercise their
stock options upon termination of employment.
 
SFAS 123 requires the disclosure of pro forma net income (loss) had the Company
adopted the fair value method as of the beginning of 1995. Under SFAS 123, the
fair value of stock-based awards to employees is calculated through the use of
option pricing models, even though such models were developed to estimate the
fair value of freely tradable, fully transferable options without vesting
restrictions, which significantly differ from the Company's stock option awards.
These models also require subjective assumptions, including future stock price
volatility and expected time to exercise, which greatly affects the calculated
values. The Company's calculations were made using the Black-Scholes option
pricing model with risk-free interest rates of approximately 5.42%, 5.38% and
6.30% in 1998, 1999 and 2000, respectively, and no dividends during the expected
term. Volatility assumed was 0 in 1998 and 1999 and 1.7028 in 2000. The
Company's calculations are based on a multiple-option valuation approach, and
forfeitures are recognized as they occur.
 
For purposes of pro forma disclosures, the estimated fair value of an option is
amortized to expense over the option's vesting period. The Company's pro forma
information follows (in thousands):
 

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                           ------------------------------
                                                             1998       1999       2000
                                                           --------   --------   --------
<S>                                                        <C>        <C>        <C>
Pro forma net income (loss)..............................   $ 106     $(28,550)  $(28,094)
Pro forma net income (loss) per common share:
  Basic..................................................   $0.08     $ (19.41)  $ (10.28)
  Diluted................................................   $0.01     $ (19.41)  $ (10.28)
</TABLE>

 
1997 EMPLOYEE STOCK PURCHASE PLAN
 
The Company has an Employee Stock Purchase Plan under which employees can
purchase shares of the Company's common stock based on a percentage of their
compensation, but not greater than 15% of their earnings, up to a maximum of
$25,000 of fair value per year. The purchase price per share must be equal to
the lower of 85% of the fair value of the common stock at the beginning or end
of the six-month offering period. A total of 174,489 shares of common stock are
reserved for issuance under the plan. As of December 31, 2000, 340,463 shares
had been issued under this plan.
 
On April 19, 2000 the Board of Directors amended the 1997 Employee Stock
Purchase Plan (Purchase Plan) to become effective simultaneously with the
effectiveness of the Company's initial public offering. As amended, eligible
employees may purchase stock at 85% of the lower of closing prices for the
 
                                      F-25

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 15.  STOCKHOLDERS' EQUITY (CONTINUED)
common stock at the beginning of a 24-month offering period or the end of each
six-month purchase period.
 
At December 31, 2000, the Company has reserved shares of common stock for
issuance as follows (in thousands):
 

<TABLE>
<S>                                                           <C>
Conversion of outstanding convertible preferred stock.......  11,716
Issuance under the Plans....................................   4,624
Employee stock purchase plan................................     174
Convertible preferred stock warrants........................      70
Warrants to bank............................................      31
                                                              ------
Total.......................................................  16,615
                                                              ======
</TABLE>

 
401(K) PLAN
 
During 1994, the Company established a 401(k) tax-deferred savings plan, whereby
eligible employees may contribute a percentage of their eligible compensation
but not greater than 15.0% of their earnings up to the maximum as required by
law. Company contributions are discretionary; no such Company contributions have
been made since inception of the plan.
 
NOTE 16.  INCOME TAXES
 
The provision for income taxes consists of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                                   DECEMBER 31,
                                                          ------------------------------
                                                            1998       1999       2000
                                                          --------   --------   --------
<S>                                                       <C>        <C>        <C>
Current provision:
  Federal...............................................    $105       $ --       $ --
  State.................................................      50        149        100
  Foreign...............................................      30         --         --
                                                            ----       ----       ----
Total current provision.................................    $185       $149       $100
                                                            ====       ====       ====
</TABLE>

 
The difference between the provision for income taxes and the amount computed by
applying the Federal statutory income tax rate (35%) to income before taxes is
explained below (in thousands):
 

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                     ------------------------------
                                                       1998       1999       2000
                                                     --------   --------   --------
<S>                                                  <C>        <C>        <C>
Tax provision (benefit) at federal statutory
  rate.............................................   $ 290     $(9,658)   $(7,858)
State income tax...................................      50         149        100
Federal alternative minimum taxes..................     105          --         --
Foreign taxes......................................      30          --         --
Unutilized (utilized) net operating losses.........    (290)      9,658      7,858
                                                      -----     -------    -------
Total..............................................   $ 185     $   149    $   100
                                                      =====     =======    =======
</TABLE>

 
                                      F-26

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 16.  INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets are as follows at
December 31 (in thousands):
 

<TABLE>
<CAPTION>
                                                            1999       2000
                                                          --------   --------
<S>                                                       <C>        <C>
Deferred tax assets:
  Net operating loss carryforwards......................  $  4,000   $ 13,824
  Tax credit carryforwards..............................     1,257      2,255
  Inventory related items...............................     5,746      6,391
  Reserves and accruals.................................     3,960      2,338
  Deferred revenue......................................    11,769     12,813
  Capitalized research and development costs............       476        473
  Depreciation and amortization.........................       205      1,978
  Other, net............................................     2,298        124
                                                          --------   --------
Total deferred tax assets...............................    29,711     40,196
Valuation allowance.....................................   (29,711)   (40,196)
                                                          --------   --------
Net deferred tax assets.................................  $     --   $     --
                                                          ========   ========
</TABLE>

 
The Company has established a valuation allowance equal to the net deferred tax
assets due to the uncertainties regarding the realization of deferred tax assets
based on the Company's lack of earnings history.
 
As of December 31, 2000, the Company had a federal net operating loss
carryforward of approximately $38.0 million. The federal net operating loss
carryforward will expire beginning in 2009. The Company also had federal and
state research and development tax credit carryforwards of approximately
$1.4 million and $417,000, respectively. The federal research and development
tax credit carryforwards will expire at various dates beginning in year 2007
through 2020, if not utilized. The state research and development tax credit
carryforward does not expire.
 
Utilization of the net operating losses and tax credits may be subject to a
substantial annual limitation due to the ownership change limitations provided
by the Internal Revenue Code of 1986 and similar state provisions. The annual
limitation may result in the expiration of net operating losses and tax credits
before utilization.
 
NOTE 17.  RELATED PARTY TRANSACTIONS
 
The Company recorded revenues of approximately $9.9 million, $5.1 million and
$1.9 million in 1998, 1999 and 2000, respectively, from the Series J redeemable
convertible preferred stockholder, who was a member of the Company's Board of
Directors until August 11, 1999 (of which approximately $302,000 and $263,000 is
included in accounts receivable at December 31, 1999 and 2000, respectively).
Payment terms are net 45 days.
 
NOTE 18.  RESTATEMENT
 
After consultation with the Staff of the Securities and Exchange Commission, the
Company has adjusted its accounting as to revenue recognition, sales
commissions, and accrued liabilities and restated
 
                                      F-27

<PAGE>
                                 OMNICELL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 18.  RESTATEMENT (CONTINUED)
its financial statements for each of the two years in the period ended
December 31, 1999. The effect of these adjustments is shown below (in
thousands):
 

<TABLE>
<CAPTION>
                                                                  YEARS ENDED
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1998       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Net revenue.................................................   $   --     $  777
Net income (loss)...........................................   $    7     $5,471
Net income (loss) per share (diluted).......................   $   --     $ 3.72
</TABLE>

 
NOTE 19.  SUBSEQUENT EVENTS
 
On March 9, 2001, the Company's Board of Directors took the following actions:
 
    - authorized the filing of a registration statement with the Securities and
      Exchange Commission to register shares of its common stock in connection
      with the proposed initial public offering;
 
    - authorized the change of the Company's state of incorporation to Delaware.
 
    - approved an amendment to decrease the number of shares reserved for
      issuance under the Company's 1992 Equity Incentive Plan and 1995
      Management Stock Option Plan by 626,186 shares and to increase the number
      of shares reserved for issuance under the 1999 Equity Incentive Plan by
      626,186 shares.
 
STOCK OPTION GRANTS
 
Subsequent to December 31, 2000, the Company approved grants to employees for
options to purchase 106,281 shares of its common stock at $5.60 per share in
February 2001 and 60,625 shares of its common stock at $6.40 per share in March
2001.
 
STOCK SPLIT
 
On            , 2001, the Company's stockholders approved a 1-for-1.6 reverse
stock split on the Company's common stock. Accordingly, all common stock share
and per-share data for all periods presented have been restated to reflect this
event.
 
                                      F-28

<PAGE>
 
                      REPORT OF INDEPENDENT ACCOUNTANTS
 
Board of Directors and Stockholders of
Baxter International Inc.
 
In our opinion, the accompanying balance sheet and the related statements of
operations and of cash flows present fairly, in all material respects, the
financial position of the Sure-Med Division of Baxter Healthcare Corporation
(the Business), an indirect division of Baxter International Inc., at
December 31, 1998, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Business' management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
 
As discussed in Note 2, the financial statements as of and for the year ended
December 31, 1998 have been restated to correct an error in accounting for
revenue recognition and omission of impairment losses.
 
/s/ PRICEWATERHOUSECOOPERS LLP
 
July 30, 1999, except as to Notes 2 and 12,

which are as of January 23, 2001
 
                                      F-29

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                                 BALANCE SHEET
 

<TABLE>
<CAPTION>
                                                                  AS OF
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
                                                                (restated)
<S>                                                           <C>
Current assets
  Accounts receivable, net..................................      $ 1,930
  Inventories, net..........................................        9,474
  Prepaid expenses..........................................        2,046
  Deferred costs associated with installations in process...       25,285
                                                                  -------
    Total current assets....................................       38,735
                                                                  -------
Fixed assets, net...........................................          729
Other assets................................................        1,843
                                                                  -------
    Total assets............................................      $41,307
                                                                  =======
Current liabilities
  Accounts payable..........................................      $ 2,096
  Customer deposits.........................................       10,612
  Other accrued liabilities.................................        1,232
                                                                  -------
    Total current liabilities...............................       13,940
                                                                  -------
Long-term liabilities
  Accrued warranty..........................................          592
                                                                  -------
Investment by parent........................................       26,775
                                                                  -------
    Total liabilities and Investment by Parent..............      $41,307
                                                                  =======
</TABLE>

 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-30

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                            STATEMENT OF OPERATIONS
 

<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
                                                                (restated)
<S>                                                           <C>
Net revenues................................................      $ 17,378
Costs and expenses
  Cost of goods sold (including related party charges of
    $1,058).................................................        15,790
  Selling and marketing expenses (including related party
    charges of $1,924)......................................         8,741
  General and administrative expenses (including related
    party charges of $1,198)................................         2,245
  Research and development expenses (including related party
    charges of
    $108)...................................................         1,347
  Asset impairment charge...................................         9,765
                                                                  --------
Total costs and expenses....................................        37,888
                                                                  --------
Net loss....................................................      $(20,510)
                                                                  ========
</TABLE>

 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-31

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                            STATEMENT OF CASH FLOWS
 

<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
                                                                (restated)
                                                              --------------
                                                                (brackets
                                                               denote cash
                                                                outflows)
                                                               -----------
<S>                                                           <C>
Cash flows from operations
  Net loss..................................................     $(20,510)
  Adjustments
    Depreciation and amortization...........................        1,233
    Loss on disposal........................................        9,765
    Changes in balance sheet items
      Accounts receivable, net..............................        3,866
      Inventories...........................................        4,295
      Prepaids..............................................         (504)
      Deferred costs associated with installations in
        process.............................................       (5,683)
      Accounts payable......................................       (1,221)
      Accrued liabilities...................................        4,167
                                                                 --------
  Cash flows from operations................................       (4,592)
                                                                 --------
Cash flows from investing activities
Capitalized software costs..................................       (3,690)
Capital expenditures........................................         (453)
Installed base of equipment leased to customers.............         (659)
                                                                 --------
Cash flows from investing activities........................       (4,802)
                                                                 --------
Cash flows from financing activities
Financing from Parent.......................................        9,394
                                                                 --------
Cash flows from financing activities........................        9,394
                                                                 --------
Change in cash and equivalents..............................           --
                                                                 --------
Cash and equivalents at beginning of year...................           --
                                                                 --------
Cash and equivalents at end of year.........................     $     --
                                                                 ========
</TABLE>

 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-32

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 

                         NOTES TO FINANCIAL STATEMENTS
 
1.  NATURE OF ENTITY AND BASIS OF PRESENTATION
 
The Sure-Med Division of Baxter Healthcare Corporation (the Business) is a
division of Baxter Healthcare Corporation (Baxter), which is in turn a
subsidiary of Baxter International Inc. (BII or Parent). The Business is
principally engaged in the development, manufacturing, marketing and
distribution of an automated distribution system designed to control the
dispensing of narcotics, medications and supplies in both hospital and alternate
site settings. The Business operates mainly in the domestic market, but does
sell some of its products through related parties into certain international
markets, principally Canada and Western Europe. Historically, the Business had
no separate legal status. The accompanying financial statements have been
prepared from the historical accounting records as if the Business had operated
as a separate entity.
 
The financial statements include all of the direct operating expenses of the
Business and allocations of certain shared costs from Baxter and BII.
Allocations are based on actual usage or other methods that approximate actual
usage. Management believes that the allocation methods are reasonable. However,
these allocations are not necessarily indicative of the costs and expenses that
would have resulted if the Business had been operated as a separate entity. The
financial statements also include the push down of the Parent's loss on disposal
of the business (Notes 2 and 12).
 
2.  RESTATEMENT OF FINANCIAL RESULTS
 
In the course of reviewing certain customer contracts and related documents, the
Business determined that it had made promises to customers to deliver specified
software upgrades at future dates. In several cases, the software promise was
determined to be a critical part of the arrangement with the customer. The
existence of these software upgrade promises and their significance to the
customer arrangements caused the Business to conclude that the software
component of its product was more than incidental. Accordingly, the Business has
determined that its revenues should be accounted for in accordance with the
American Institute of Certified Public Accountant's Statement of Position 97-2
("SOP 97-2"), "Software Revenue Recognition." The effects of applying SOP 97-2
on the financial statements were to defer revenues previously recorded
associated with customer arrangements that included promises to deliver software
and those when an installation effort remained as of the balance sheet date. The
Business has restated its financial statements as of December 31, 1998 and
deferred $8.8 million of revenues previously recognized in 1998. Additionally,
the Business needed to adjust opening Investment by Parent for the effects of
applying SOP 97-2 to prior periods. The effect on Investment by Parent at
December 31, 1997 was a loss of approximately $2.8 million, which relates
entirely to the application of SOP 97-2 to the year ended December 31, 1997.
 
In addition, the Parent determined that an impairment of capitalized software
and certain other long-lived assets that arose as a result of the decision to
sell the business should be reflected in these financial statements. Therefore,
an impairment charge of $9.765 million has been reflected in the restated
results of operations of the Business for the year ended December 31, 1998.
 
                                      F-33

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
FINANCIAL STATEMENT PRESENTATION
 
The preparation of the financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make estimates and
assumptions that affect reported amounts and related disclosures. Actual results
could differ from those estimates.
 
REVENUE RECOGNITION
 
Revenues are derived from the sales of automated distribution systems and
subsequent maintenance agreements. The Business markets its systems for sale or
for lease. Automated distribution system sales, which are accounted for in
accordance with SOP 97-2, are recognized when the system has been shipped, all
installation and training services have been provided, no additional performance
obligations exist and collection of the resulting receivables are probable. The
Business does not provide post-contract customer support. All leasing
arrangements are sales-type leases and revenue is recognized when all of the
above conditions are met and the non-cancelable lease term has commenced.
Revenues from service agreements are recognized ratably over the related
contract period.
 
Upon title transfer to the customer, the cost of inventory is reclassified to
deferred costs associated with installations in process. Upon completion of
installation and training services and performance of any other obligations, the
associated deferred costs are relieved to cost of sales to be matched against
the related sales revenue.
 
CASH
 
The Business has not maintained any cash accounts and all cash management
activities have been performed by Baxter and BII.
 
ACCOUNTS RECEIVABLE
 
Accounts receivable are shown net of allowance for doubtful accounts of $278.
 
INVENTORIES
 

<TABLE>
<CAPTION>
                                                                  AS OF
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
<S>                                                           <C>
Raw materials...............................................      $ 2,379
Finished products...........................................        8,673
                                                                  -------
Total gross inventories.....................................       11,052
Inventory reserves..........................................       (1,578)
                                                                  -------
Total net inventories.......................................      $ 9,474
                                                                  =======
</TABLE>

 
Inventories are stated at the lower of cost (first-in, first-out method) or
market value. Market value for raw materials is based on replacement costs and,
for finished products, on net realizable value.
 
                                      F-34

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED COSTS ASSOCIATED WITH INSTALLATIONS IN PROCESS
 
Deferred costs associated with installations in process consists of inventory
and installation costs related to inventory at customers' locations which is
awaiting completion of installation, training or other performance obligations.
 
FIXED ASSETS
 

<TABLE>
<CAPTION>
                                                                  AS OF
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
<S>                                                           <C>
Computer equipment..........................................      $ 1,702
Machinery and equipment.....................................          756
                                                                  -------
Total fixed assets, at cost.................................        2,458
Accumulated depreciation and other write-downs..............       (1,729)
                                                                  -------
Net fixed assets............................................      $   729
                                                                  =======
</TABLE>

 
Fixed assets are carried at cost less accumulated depreciation and other
writedowns (Note 2). Expenditures for repairs and maintenance are charged to
expense as incurred and were not significant for 1998. Interest costs applicable
to the construction of major projects are capitalized when material.
 
Depreciation is principally calculated on the straight-line method over the
estimated useful lives of the related assets, which range from three to five
years. Straight-line and accelerated methods of depreciation are used for income
tax purposes.
 
Depreciation expense was $511 in 1998. Capitalized interest was not material in
1998.
 
LEASE ACCOUNTING
 
The Business offers lease financing to its customers under the terms of its
standard five-year sales-type lease. Leases originated by the business result in
the recognition of revenue (present value of lease payments, net of executory
costs) and cost of sales (actual cost of automated distribution system), as well
as the recording of unearned income (excess of gross receivable plus estimated
residual value over the cost of the equipment). Consistent with the Business'
revenue recognition policy and concurrent with lease initiation, all leases are
automatically included in a pool of leases sold on a non-recourse basis to a
third party financial institution under the terms of a rolling lease sale
agreement administered by the Parent ("Lease Sale Program"). As a result of this
arrangement, all leased receivable balances and associated unearned income
amounts are reclassified from their original balance sheet classifications and
reflected as net activity within Investment by Parent (Note 11). The Business
retains all warranty obligations related to units sold under the Lease Sale
Program. The amount of gross leased receivables sold under the Lease Sale
Program were $10,870 for the year ended December 31, 1998.
 
                                      F-35

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
WARRANTIES
 
Estimated future warranty obligations related to products sold or leased are
provided by charges to operations in the period of product sale or lease
inception. The standard warranty period for products sold or leased is one year
and five years, respectively. The cost of warranty obligations is contractually
capitated as part of an agreement with a third party.
 
SEGMENT INFORMATION
 
BII adopted Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information" (SFAS No. 131) in 1998.
This statement establishes standards for the reporting of information about
operating segments in annual and interim financial statements. Operating
segments are defined as components of an enterprise for which separate financial
information is available that is evaluated regularly by the chief operating
decision maker(s) in deciding how to allocate resources and in assessing
performance. SFAS No. 131 also requires disclosures about products and services,
geographic areas and major customers. The adoption of SFAS No. 131 did not
affect results of operations, financial position or the disclosure of segment
information. Refer to Note 10 for the Business' segment information.
 
4.  TRANSACTIONS WITH RELATED PARTIES
 
A portion of the operations of the Business involves transactions with
subsidiaries and divisions of BII.
 
A division of Baxter provides accounting, administrative and other services
related to the business' sales-type leases with its customers. The Business is
charged for such services at a rate which management believes approximates the
market rate. As discussed in Note 3, Baxter sells substantially all of the
Business' lease receivables to an independent third party.
 
In addition, the corporate headquarters of BII and the divisional headquarters
of Baxter provide to the Business certain other accounting, tax, and
administrative services. All significant expenses relating to such services are
included in the financial statements of the Business.
 
The financial statements of the Business include expenses of $4,288 in 1998 for
services provided by related parties.
 
5.  FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
 
CONCENTRATIONS OF CREDIT RISK
 
In the normal course of business, the company provides credit to customers in
the health-care industry, performs credit evaluations of these customers and
maintains reserves for potential credit losses which, when realized, have been
within the range of management's allowance for doubtful accounts.
 
The carrying values of financial instruments approximate their fair values.
 
                                      F-36

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
6.  CUSTOMER DEPOSITS AND OTHER ACCRUED LIABILITIES
 

<TABLE>
<CAPTION>
                                                                  AS OF
                                                               DECEMBER 31,
                                                                   1998
                                                              --------------
                                                              (in thousands)
<S>                                                           <C>
Customer deposits...........................................      $10,612
                                                                  =======
Other current accrued liabilities:
  Employee compensation and withholdings....................          647
  Other.....................................................          585
                                                                  -------
Total.......................................................      $ 1,232
                                                                  =======
</TABLE>

 
Customer deposits represents cash received from customers related to sales for
which revenue is not yet eligible for recognition under the Business' revenue
recognition policy.
 
7.  STOCK-BASED COMPENSATION PLANS
 
Certain employees of the Business participate in stock-based compensation plans
sponsored by BII. Such plans principally include fixed stock option plans and an
employee stock purchase plan. BII applies APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
plans. Accordingly, no compensation cost has been recognized by BII for its
fixed stock option plans and its stock purchase plan. These plans are the sole
responsibility of BII and, accordingly, no information is presented herein.
 
8.  RETIREMENT AND OTHER BENEFIT PROGRAMS
 
Substantially all of the employees of the Business are eligible to participate
in BII's contributory defined contribution plan, non-contributory defined
benefit pension plans and certain other postretirement benefit plans. These
plans are the sole responsibility of BII and, accordingly, no information is
presented herein related to those plans. Total expense recognized by the
Business relating to these plans was $329 in 1998.
 
9.  INCOME TAXES
 
The results of the Business' operations are included in the consolidated tax
return of BII. These financial statements do not reflect income tax benefit for
1998 or recent prior years in which losses were incurred. As instructed by its
parent, the Business calculates its taxes as if it were filing its own return.
On a separate return basis, the losses incurred in recent years through
December 31, 1998 would have given rise to net operating loss carryforwards and
related deferred tax assets. Due to the uncertainty of ultimate utilization of
those carryforwards on a separate-return basis, the Business would have recorded
valuation allowances for the full amounts of those deferred tax assets. The tax
effects of other temporary differences that give rise to deferred tax assets and
liabilities at December 31, 1998 were not material.
 
The Business, on a stand-alone basis, would have a net operating loss
carryforward for federal income tax purposes of approximately $48,000 at
December 31, 1998. However, since the Business has been included in the
consolidated tax filings of BII, its prior losses have been utilized in the BII
consolidated
 
                                      F-37

<PAGE>
               SURE-MED DIVISION OF BAXTER HEALTHCARE CORPORATION
 
              (AN INDIRECT DIVISION OF BAXTER INTERNATIONAL INC.)
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
9.  INCOME TAXES (CONTINUED)
tax returns. As such, should the Business actually file separate tax returns in
the future, no net operating losses would be available.
 
10.  SEGMENT INFORMATION
 
The Business operates in one segment, the pharmacy automation market, the
activities and products of which are described in Note 1.
 
GEOGRAPHIC INFORMATION
 
The following geographic area data include net sales based on product shipment
destination.
 

<TABLE>
<CAPTION>
                                                                1998
                                                              --------
<S>                                                           <C>
Net Sales
United States...............................................  $16,276
Other countries.............................................    1,102
                                                              -------
Consolidated totals.........................................  $17,378
                                                              =======
</TABLE>

 
11.  INVESTMENT BY PARENT
 
Investment by Parent represents Baxter's ownership interest in the recorded net
assets of the Business. All cash transactions with Baxter and BII are reflected
in this amount. In addition, all intercompany expenses charged from the Parent
are not expected to be settled and, therefore, while recorded as expenses in the
appropriate period, have been considered additional contributions from the
Parent. The Business has not been charged interest on any investments made by
the Parent other than those amounts capitalized into fixed assets as disclosed
in Note 2. A summary of the activity is as follows:
 

<TABLE>
<S>                                                           <C>
Balance at December 31, 1997................................  $ 38,485
Net loss....................................................   (20,510)
Leased receivable transfers, net of unearned income (Note
  3)........................................................    (8,910)
Other net intercompany activity.............................    17,710
                                                              --------
Balance at December 31, 1998................................  $ 26,775
                                                              ========
</TABLE>

 
12.  SUBSEQUENT EVENTS
 
In January 1999, Baxter finalized the terms of its sale of certain assets of the
Business to Omnicell Technologies (Omnicell) for proceeds that were finalized in
December of 1999 of $2.1 million in cash and Omnicell's note payable of
approximately $8.0 million.
 
                                      F-38

<PAGE>
                                         SHARES
 
                                 OMNICELL, INC.
 
                                  COMMON STOCK
 
                                     [LOGO]
 
                                ----------------
 
                                   PROSPECTUS
                                ----------------
 
Until           , 2001, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
 
                           U.S. BANCORP PIPER JAFFRAY
 
                               CIBC WORLD MARKETS
 
                                    SG COWEN
 
                                          , 2001

<PAGE>

 
                                   PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
    The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the registrant in connection with the sale
of the common stock being registered. All the amounts shown are estimates except
for the SEC registration fee and the NASD filing fee.
 

<TABLE>
<S>                                                           <C>
SEC registration fee........................................  $   17,250
Nasdaq National Market listing fee..........................      17,500
NASD filing fee.............................................       7,400
Printing and engraving expenses.............................     250,000
Legal fees and expenses.....................................     600,000
Accounting fees and expenses................................     550,000
Transfer agent and registrar fees...........................      50,000
Miscellaneous...............................................     107,850
                                                              ----------
Total.......................................................  $1,600,000
                                                              ==========
</TABLE>

 
We intend to pay all expenses of registration, issuance and distribution.
 

ITEM 14.  INDEMNIFICATION OF OFFICERS AND DIRECTORS.
 
    Section 145 of the Delaware General Corporation Law (the DGCL) authorizes a
court to award, or a corporation's board of directors to grant indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities, including
reimbursement for expenses incurred, arising under the Securities Act.
 
    As permitted by the DGCL, our Certificate of Incorporation, which will
become effective prior to the closing of this offering, includes a provision
that eliminates the personal liability of our directors for monetary damages for
breach of fiduciary duty as a director, except for liability (1) for any breach
of the director's duty of loyalty to us or our stockholders; (2) for acts or
omissions not in good faith or that involve intentional misconduct or knowing
violation of law; (3) under Section 174 of the DGCL regarding unlawful dividends
and stock purchases; or (4) for any transaction from which the director derived
an improper personal benefit.
 
    As permitted by the DGCL, our Certificate of Incorporation and/or our
Bylaws, which will become effective prior to the closing of this offering,
provide that (1) we are required to indemnify our directors and officers to the
fullest extent permitted by the DGCL, subject to certain very limited
exceptions; (2) we are permitted to indemnify our other employees to the extent
that we indemnify our officers and directors, unless otherwise required by law,
our Certificate of Incorporation, our Bylaws or agreements; (3) we are required
to advance expenses, as incurred, to our directors and officers in connection
with a legal proceeding to the fullest extent permitted by the DGCL, subject to
certain very limited exceptions; and (4) the rights conferred in our Bylaws are
not exclusive.
 
    Prior to the closing of this offering, we intend to enter into indemnity
agreements with each of our current directors and officers to give such
directors and officers additional contractual assurances regarding the scope of
the indemnification set forth in our Certificate of Incorporation and our Bylaws
and to provide additional procedural protections. At present, there is no
pending litigation or proceeding involving a director, officer or employee of
Omnicell.com regarding which indemnification is sought, nor are we aware or any
threatened litigation that may result in claims for indemnification.
 
    With approval by the board of directors, we expect to obtain directors' and
officers' liability insurance. Reference is made to the underwriting agreement
contained in Exhibit 1.1 hereto, which contains provisions indemnifying our
officers and directors against certain liabilities.
 
                                      II-1

<PAGE>

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES.
 
(a) The Company has issued or sold the following securities within the past
    three years:
 
    - an aggregate of 3,010,528 shares of Series K convertible preferred stock
      at $9.50 per share in January and March 2000 to 25 accredited investors,
      including 105,264 shares sold to Commerce One.
 
    - an aggregate of 26,315 shares of common stock issuable upon exercise of a
      warrant issued to a financial institution.
 
(b) As of December 31, 2000, the Company has issued:
 
    - an aggregate of 1,651,198 shares of common stock upon exercise of options
      under the 1992 Equity Incentive Plan;
 
    - an aggregate of 1,122,839 shares of common stock upon exercise of options
      under the 1995 Management Stock Option Plan;
 
    - an aggregate of 544,741 shares of common stock upon exercise of options
      under the 1997 Employee Stock Purchase Plan; and
 
    - an aggregate of 238,308 shares of common stock under the 1999 Equity
      Incentive Plan.
 
(c) There were no underwritten offerings employed in connection with the
    transaction set forth in Item 15(a).
 
    The issuances described in Item 15(a) were deemed to be exempt from
registration under the Securities Act in reliance upon Section 4(2) thereof as
transactions by an issuer not involving any public offering. The issuances
described in Item 15(b) were deemed to be exempt from registration under the
Securities Act in reliance upon Rule 701 promulgated thereunder in that they
were offered and sold either pursuant to written compensatory benefit plans or
pursuant to a written contract relating to compensation, as provided by
Rule 701. In addition, such issuances were deemed to be exempt from registration
under Section 4(2) of the Securities Act as transactions by an issuer not
involving any public offering. The recipients of securities in each such
transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends where affixed to the securities
issued in such transactions. All recipients had adequate access, through their
relationships with the Company, to information about the Registrant.
 

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
(a) Exhibits.
 

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                             DESCRIPTION OF DOCUMENT
       -------                            -----------------------
<S>                     <C>
 1.1*                   Form of Underwriting Agreement.
 3.1                    Amended and Restated Articles of Incorporation of the
                        registrant.
 3.2                    Certificate of Amendment of Amended and Restated Articles of
                        Incorporation of the registrant.
 3.3                    Certificate of Incorporation of the registrant to be
                        effective upon reincorporation in Delaware.
 3.4                    Amended and Restated Certificate of Incorporation of the
                        registrant to be filed following the closing of the
                        offering.
 3.5                    Bylaws of the registrant.
 3.6                    Bylaws of the registrant to be effective upon
                        reincorporation in Delaware.
 4.1*                   Form of Common Stock Certificate.
</TABLE>

 
                                      II-2

<PAGE>
 

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                             DESCRIPTION OF DOCUMENT
       -------                            -----------------------
<S>                     <C>
 4.2                    Amended and Restated Investor Rights Agreement, dated
                        January 20, 2000.
 4.3                    Warrant Agreement, dated September 30, 1993, between the
                        registrant and Comdisco, Inc.
 4.4                    Warrant Agreement, dated January 23, 1995, between the
                        registrant and Comdisco, Inc.
 4.5                    Warrant Agreement, dated July 7, 1995, between the
                        registrant and Comdisco, Inc.
 4.6                    Warrant Agreement, dated September 29, 1995, between the
                        registrant and Comdisco, Inc.
 4.7                    Convertible Promissory Note, dated October 1, 1999.
 5.1*                   Opinion of Cooley Godward LLP, counsel to the registrant.
10.1                    Real Property Lease, dated September 24, 1999, between W.F.
                        Baton & Co., Inc. and Omnicell.com, as amended.
10.2                    Real Property Lease, effective July 1, 1999, between the
                        registrant and Amli Commercial Properties Limited
                        Partnership.
10.3                    Real Property Lease, dated April 3, 1996, between O'Donnell
                        Palo Alto Associates and the registrant.
10.4                    Real Property Lease, dated March 25, 1994, between W.F.
                        Batton & Co., Inc. and the registrant, as amended.
10.5                    Master Assignment Agreement and Master Sales Agreement,
                        dated September 29, 1994, between Americorp Financial, Inc.
                        and the registrant, as amended.
10.6                    Group Purchasing Agreement, effective June 1, 1997, between
                        Premier Purchasing Partners, L.P., and the registrant.
10.7                    Letter Agreement, dated June 27, 1997, between the
                        University Health System Consortium Services Corporation and
                        the registrant.
10.8                    Federal Supply Schedule Contract No. V797P-3406k, effective
                        August 7, 1997, between the Department of Veterans Affairs
                        and the registrant.
10.9                    Asset Purchase Agreement dated December 18, 1998, between
                        the registrant and Baxter Healthcare Corporation, as
                        amended.
10.10                   Loan and Security Agreement and Standby Facility Agreement,
                        dated January 27, 2000, between Silicon Valley Bank and the
                        registrant.
10.11**                 Vertical Hosted License Agreement, dated August 21, 1999,
                        between the registrant and Commerce One, Inc., as amended.
10.12                   Form of Director and Officer Indemnification Agreement.
10.13                   1992 Equity Incentive Plan, as amended.
10.14                   1995 Management Stock Option Plan.
10.15                   1997 Employee Stock Purchase Plan, as amended.
10.16                   1999 Equity Incentive Plan, as amended.
10.17                   Program Agreement, dated June 7, 1999, between General
                        Electric Company and the registrant.
10.18                   Employment Agreement, dated December 13, 1993, between the
                        registrant and Sheldon D. Asher.
21.1                    Subsidiaries of the registrant.
23.1                    Consent of Ernst & Young LLP, Independent Auditors.
23.2                    Consent of PricewaterhouseCoopers LLP, Independent
                        Accountants.
23.3*                   Consent of Cooley Godward LLP. Reference is made to
                        Exhibit 5.1.
</TABLE>

 
                                      II-3

<PAGE>
 

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                             DESCRIPTION OF DOCUMENT
       -------                            -----------------------
<S>                     <C>
24.1                    Powers of Attorney. Reference is made to Page II-5.
</TABLE>

 
------------------------
 
*   To be filed by amendment.
 
**  Confidential treatment requested.
 
(b) Financial Statement Schedules.
 
    Schedule II--Valuation and Qualifying Accounts
 
    All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
 

ITEM 17.  UNDERTAKINGS.
 
    The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
 
    Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered hereunder, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
 
    The Registrant hereby undertakes that:
 
    (1) For purposes of determining any liability under the Securities Act, the
       information omitted from the form of Prospectus filed as part of this
       Registration Statement in reliance upon Rule 430A and contained in a form
       of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
       (4) or 497(h) under the Securities Act shall be deemed to be a part of
       this Registration Statement as of the time it was declared effective.
 
    (2) For the purpose of determining any liability under the Securities Act,
       each post-effective amendment that contains a form of Prospectus shall be
       deemed to be a new Registration Statement relating to the securities
       offered therein, and the offering of such securities at that time shall
       be deemed to be the initial bona fide offering thereof.
 
                                      II-4

<PAGE>

                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Palo Alto, State of
California, on the 14th day of March, 2001.
 

<TABLE>
<S>                                                    <C>  <C>
                                                       OMNICELL, INC.
 
                                                       By:             /s/ SHELDON D. ASHER
                                                            -----------------------------------------
                                                                         Sheldon D. Asher
                                                              PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

 
                               POWER OF ATTORNEY
 
    Each person whose signature appears below constitutes and appoints
Sheldon D. Asher and Robert Y. Newell, IV his true and lawful attorney-in-fact
and agent, each acting alone, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capabilities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement on From S-1, and to any registration
statement filed under Securities and Exchange Commission Rule 462, and to file
the same, with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
 
    Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
 

<TABLE>
<CAPTION>
                 SIGNATURES                                    TITLE                       DATE
                 ----------                                    -----                       ----
<C>                                            <S>                                    <C>
            /s/ SHELDON D. ASHER               President and Chief Executive Officer
    ------------------------------------         and Director (PRINCIPAL EXECUTIVE    March 14, 2001
              Sheldon D. Asher                   OFFICER)
 
          /s/ ROBERT Y. NEWELL, IV             Vice President and Chief Financial
    ------------------------------------         Officer (PRINCIPAL FINANCIAL AND     March 14, 2001
            Robert Y. Newell, IV                 ACCOUNTING OFFICER)
 
            /s/ RANDALL A. LIPPS
    ------------------------------------       Chairman of the Board and Director     March 14, 2001
              Randall A. Lipps
 
            /s/ GORDON V. CLEMONS
    ------------------------------------       Director                               March 14, 2001
              Gordon V. Clemons
 
        /s/ CHRISTOPHER J. DUNN, M.D.
    ------------------------------------       Director                               March 14, 2001
          Christopher J. Dunn, M.D.
</TABLE>

 
                                      II-5

<PAGE>
 

<TABLE>
<CAPTION>
                 SIGNATURES                                    TITLE                       DATE
                 ----------                                    -----                       ----
<C>                                            <S>                                    <C>
          /s/ FREDERICK J. DOTZLER
    ------------------------------------       Director                               March 14, 2001
            Frederick J. Dotzler
 
             /s/ RANDALL A. HACK
    ------------------------------------       Director                               March 14, 2001
               Randall A. Hack
 
          /s/ BENJAMIN A. HOROWITZ
    ------------------------------------       Director                               March 14, 2001
            Benjamin A. Horowitz
 
             /s/ KEVIN L. ROBERG
    ------------------------------------       Director                               March 14, 2001
               Kevin L. Roberg
 
           /s/ JOHN D. STOBO, JR.
    ------------------------------------       Director                               March 14, 2001
             John D. Stobo, Jr.
 
         /s/ WILLIAM H. YOUNGER, JR.
    ------------------------------------       Director                               March 14, 2001
           William H. Younger, Jr.
</TABLE>

 
                                      II-6

<PAGE>
                                  SCHEDULE II
                                 OMNICELL, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
 

<TABLE>
<CAPTION>
                                                                ADDITIONS
                                                         -----------------------
                                           BALANCE AT    CHARGED TO   CHARGED TO                BALANCE
                                          BEGINNING OF   COSTS AND      OTHER                    END OF
DESCRIPTION                                  PERIOD       EXPENSES     ACCOUNTS    DEDUCTIONS    PERIOD
-----------                               ------------   ----------   ----------   ----------   --------
<S>                                       <C>            <C>          <C>          <C>          <C>
Year ended December 31, 1998 allowance
  for doubtful accounts.................    $218,368       $60,000           --           --    $278,368
Year ended December 31, 1999 allowance
  for doubtful accounts.................     278,368        60,000           --           --     338,368
Year ended December 31, 2000 allowance
  for doubtful accounts.................     338,368        60,000           --      (26,432)    371,936
</TABLE>

 
                                      S-1

<PAGE>

                                 EXHIBIT INDEX
 

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                               DESCRIPTION OF DOCUMENT
-------            ------------------------------------------------------------
<S>                <C>
 1.1*              Form of Underwriting Agreement.
 
 3.1               Amended and Restated Articles of Incorporation of the
                   registrant.
 
 3.2               Certificate of Amendment of Amended and Restated Articles of
                   Incorporation of the registrant.
 
 3.3               Certificate of Incorporation of the registrant to be
                   effective upon reincorporation in Delaware.
 
 3.4               Amended and Restated Certificate of Incorporation of the
                   registrant to be filed following the closing of the
                   offering.
 
 3.5               Bylaws of the registrant.
 
 3.6               Bylaws of the registrant to be effective upon
                   reincorporation in Delaware.
 
 4.1*              Form of Common Stock Certificate.
 
 4.2               Amended and Restated Investor Rights Agreement dated
                   January 20, 2000.
 
 4.3               Warrant Agreement, dated September 30, 1993, between the
                   registrant and Comdisco, Inc.
 
 4.4               Warrant Agreement, dated January 23, 1995, between the
                   registrant and Comdisco, Inc.
 
 4.5               Warrant Agreement, dated July 7, 1995, between the
                   registrant and Comdisco, Inc.
 
 4.6               Warrant Agreement, dated September 29, 1995, between the
                   registrant and Comdisco, Inc.
 
 4.7               Convertible Promissory Note, dated October 1, 1999.
 
 5.1*              Opinion of Cooley Godward LLP, counsel to the registrant.
 
10.1               Real Property Lease, dated September 24, 1999, between W.F.
                   Batton & Co., Inc. and the registrant, as amended.
 
10.2               Real Property Lease, effective July 1, 1999, between the
                   registrant and Amli Commercial Properties Limited
                   Partnership.
 
10.3               Real Property Lease, dated April 3, 1996, between O'Donnell
                   Palo Alto Associates and the registrant.
 
10.4               Real Property Lease, dated March 25, 1994, between W.F.
                   Batton & Co., Inc. and the registrant, as amended.
 
10.5               Master Assignment Agreement and Master Sales Agreement,
                   dated September 29, 1994, between Americorp Financial, Inc.
                   and the registrant, as amended.
 
10.6               Group Purchasing Agreement, effective June 1, 1997, between
                   Premier Purchasing Partners, L.P., and the registrant.
 
10.7               Letter Agreement, dated June 27, 1997, between the
                   University Health System Consortium Services Corporation and
                   the registrant.
 
10.8               Federal Supply Schedule Contract No. V797P-3406k, effective
                   August 7, 1997, between the Department of Veterans Affairs
                   and the registrant.
 
10.9               Asset Purchase Agreement dated December 18, 1998, between
                   the registrant and Baxter Healthcare Corporation, as
                   amended.
 
10.10              Loan and Security Agreement and Standby Facility Agreement,
                   dated January 27, 2000, between Silicon Valley Bank and the
                   registrant.
 
10.11**            Vertical Hosted License Agreement, dated August 21, 1999,
                   between the registrant and Commerce One, as amended.
</TABLE>

 

<PAGE>
 

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                               DESCRIPTION OF DOCUMENT
-------            ------------------------------------------------------------
<S>                <C>
10.12              Form of Director and Officer Indemnification Agreement.
 
10.13              1992 Equity Incentive Plan, as amended.
 
10.14              1995 Management Stock Option Plan.
 
10.15              1997 Employee Stock Purchase Plan, as amended.
 
10.16              1999 Equity Incentive Plan, as amended.
 
10.17              Program Agreement, dated June 7, 1999, between General
                   Electric Company and Omnicell.com.
 
10.18              Employment Agreement, dated December 13, 1993, between the
                   registrant and Sheldon D. Asher.
 
21.1               Subsidiaries of the registrant.
 
23.1               Consent of Ernst & Young LLP, Independent Auditors.
 
23.2               Consent of PricewaterhouseCoopers LLP, Independent
                   Accountants.
 
23.3*              Consent of Cooley Godward LLP. Reference is made to
                   Exhibit 5.1.
 
24.1               Powers of Attorney. Reference is made to Page II-5.
</TABLE>

 
------------------------
 
*   To be filed by amendment.
 
**  Confidential treatment requested.





<PAGE>

                              AMENDED AND RESTATED

                            ARTICLES OF INCORPORATION

                                       OF

                                  OMNICELL.COM

         Randall Lipps and Robert J. Brigham certify that:

         1. They are the Chairman of the Board and Assistant Secretary,
respectively, of OmniCell.com, a California corporation.

         2. The Articles of Incorporation of the Corporation are amended and
restated in full to read as follows:

                                       "I

         The name of the Corporation is OmniCell.com.

                                       II

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

                                       III

         The Corporation is authorized to issue two classes of shares to be
designated respectively Common Stock and Preferred Stock. The total number of
shares of Common Stock the Corporation shall have authority to issue is
35,000,000 and the total number of shares of Preferred Stock the Corporation
shall have authority to issue is 18,500,000. The Preferred Stock may be issued
from time to time in one or more series. The Board of Directors is authorized to
fix the number of shares of any series of Preferred
 Stock and, subject to the
rights of existing shareholders set forth in Article IV, Section 6, to determine
or alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and, within the
limits and restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any series of
Preferred Stock, to increase or decrease (but not below the number of shares of
any such series then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series (subject to the provisions of
Section 6 of Article IV hereof).

         The Common Stock shall be divided into two series, to be designated,
respectively, Class A Voting Common Stock, consisting of 32,500,000 shares
("Class A Common"), and Class B Non-voting Common Stock, consisting of 2,500,000
shares ("Class B Common").


<PAGE>

         The first series of Preferred Stock shall be designated Series A
Preferred Stock ("Series A Preferred") and shall consist of 480,000 shares. The
second series of Preferred Stock shall be designated Series B Preferred Stock
("Series B Preferred") and shall consist of 320,666 shares. The third series of
Preferred Stock shall be designated Series C Preferred Stock ("Series C
Preferred") and shall consist of 1,700,000 shares. The fourth series of
Preferred Stock shall be designated Series D Preferred Stock ("Series D
Preferred") and shall consist of 1,328,000 shares. The fifth series of Preferred
Stock shall be designated Series E Preferred Stock ("Series E Preferred") and
shall consist of 1,966,000 shares. The sixth series of Preferred Stock shall be
designated Series F Preferred Stock ("Series F Preferred") and shall consist of
2,000,000 shares. The seventh series of Preferred Stock shall be designated
Series G Preferred Stock ("Series G Preferred") and shall consist of 1,000,000
shares. The eighth series of Preferred Stock shall be designated Series H
Preferred Stock ("Series H Preferred") and shall consist of 4,000,000 shares.
The ninth series of Preferred Stock shall be designated Series J Preferred Stock
("Series J Preferred") and shall consist of 1,802,000 shares. The tenth series
of Preferred Stock shall be designated Series K Preferred Stock ("Series K
Preferred") and shall consist of 2,105,263 shares. The Series A Preferred, the
Series B Preferred, the Series C Preferred, the Series D Preferred, the Series E
Preferred, the Series F Preferred, Series G Preferred, Series H Preferred,
Series J Preferred and Series K Preferred shall be referred to as the
"Preferred."

                                       IV

         The relative rights, preferences, privileges and restrictions granted
to or imposed on the respective classes of the shares of capital stock or the
holders thereof are as follows:

         1. DIVIDENDS.

                  (a) The holders of the Series J Preferred shall be entitled to
receive in any fiscal year, when and as declared by the Board of Directors, out
of any assets legally available therefore, dividends in cash at an annual rate
of $1.12 per share (as adjusted for any stock dividends, combinations,
consolidations or splits with respect to such shares). The right to such
dividends shall not be cumulative and no right shall accrue to holders of Series
J Preferred by reason of the fact that dividends on such shares were not
declared in any prior year, nor shall any undeclared dividends bear or accrue
interest. Such dividends shall be prior and in preference to any declaration or
payment of any dividend, (payable other than in common stock) on the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred, Series E
Preferred, Series F Preferred, Series G Preferred, Series H Preferred, Series K
Preferred, or Common Stock. No dividend may be paid on the Series A Preferred,
the Series B Preferred, the Series C Preferred, the Series D Preferred, the
Series E Preferred, the Series F Preferred, the Series G Preferred, the Series H
Preferred, Series K Preferred or the Common Stock unless and until any and all
dividends have been paid to the Series J Preferred.

                  (b) After payment of all required dividends required to the
holders of Series J Preferred, the holders of outstanding Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, Series E Preferred,
Series F Preferred, Series G Preferred, Series H Preferred, and Series K
Preferred shall be entitled to receive in any fiscal year, when and as 


<PAGE>

declared by the Board of Directors, out of any assets at the time legally
available therefor, dividends in cash at an annual rate of $0.02 per share of
Series A Preferred, $0.03 per share of Series B Preferred, $0.048 per share of
Series C Preferred, $0.085 per share of Series D Preferred, $0.265 per share of
Series E Preferred, $0.49 per share of Series F Preferred, $0.49 per share of
Series G Preferred, $0.29 per share of Series H Preferred, and $0.76 per share
of Series K Preferred (as adjusted for any stock dividends, combinations,
consolidations or splits with respect to such shares). Such dividends may be
payable quarterly or otherwise as the Board of Directors may from time to time
determine. The right to such dividends shall not be cumulative and no right
shall accrue to holders of such Preferred by reason of the fact that dividends
on such shares were not declared in any prior year, nor shall any undeclared
dividends bear or accrue interest.

                  (c) Any partial payment of such dividends to the holders of
the Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred, Series E Preferred, Series F Preferred, Series G Preferred, Series H
Preferred and Series K Preferred shall be made in proportion to the amount each
such holder would be entitled to receive as set forth above if such amounts were
paid in full. Dividends other than dividends payable solely in Common Stock may
be declared or paid upon shares of Common Stock in any fiscal year of the
Corporation only if dividends at the annual rates set forth above shall have
been paid or declared and set apart upon all shares of Preferred for such fiscal
year. No dividend shall be declared or paid with respect to the Common Stock
unless at the same time an equivalent dividend is declared or paid with respect
to the Preferred on an as-if-converted to Common Stock basis. Any declared but
unpaid dividends on the Preferred shall be paid upon the conversion of such
shares into Common Stock either (at the option of the Corporation) by payment of
cash or by the issuance of additional shares of Common Stock based upon the fair
market value of the Common Stock at the time of conversion, as determined by the
Board of Directors. No dividend payable in Common Stock shall be declared or
paid with respect to any series of Preferred unless at the same time a similar
dividend is declared or paid to all series of Preferred on an as-if-converted to
Common Stock basis, such that the holders of no series of Preferred shall hold a
greater proportion of the Corporation's Common Stock following such dividend (on
an as-if converted basis) than immediately prior to such dividend.

         2. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the shareholders of the Corporation shall be made in the
following manner:

                  (a) Holders of the Series J Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, Series E Preferred,
Series F Preferred, Series G Preferred, Series H Preferred, Series K Preferred
or Common Stock by reason of their ownership thereof, the amount of $14.03274
per share (as adjusted for any stock dividends, combinations, consolidations or
splits with respect to such shares), plus all accrued or declared but unpaid
dividends on such share for each share of Series J Preferred then held by them.
If the assets and funds thus distributed among the holders of Series J Preferred
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of Series J Preferred in proportion to the full preferential amount each
such holder is otherwise entitled to receive.


<PAGE>

                  (b) Subject to the payment in full of the liquidation
preferences with respect to the Series J Preferred as provided in Section 2(a)
above, the holders of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, Series E Preferred, Series F Preferred, Series G
Preferred, Series H Preferred and Series K Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of $0.25 per share for each share of
Series A Preferred then held by them, $0.375 per share for each share of Series
B Preferred then held by them, $0.60 per share for each share of Series C
Preferred then held by them, $1.085 per share for each share of Series D
Preferred then held by them, $3.30 per share of Series E Preferred then held by
them, $6.15 per share of Series F Preferred then held by them, $6.15 per share
of Series G Preferred then held by them, $3.68 per share of Series H Preferred
then held by them, and, for the holders of Series K Preferred, the greater of
(i) $9.50 per share of Series K Preferred then held by them and (ii) the amount
per share of Series K Preferred they would have received if they had converted
their Series K Preferred into Common Stock immediately prior to the liquidation,
adjusted for any stock dividends, combinations, consolidations, or splits with
respect to such shares and, in addition, an amount equal to all declared but
unpaid dividends on the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, Series E Preferred, Series F Preferred, Series G
Preferred, Series H Preferred and Series K Preferred. If the assets and funds
thus distributed among the holders of Preferred shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amount, then the
entire assets and funds of the Corporation remaining after payment in full of
the liquidation preference set forth in Section 2(a) and legally available for
distribution shall be distributed among the holders of Preferred in proportion
to the full preferential amount each such holder is otherwise entitled to
receive. After payment has been made to the holders of Preferred of the full
amounts to which they shall be entitled as aforesaid, the holders of the Common
Stock shall be entitled to receive ratably on a per-share basis all the
remaining assets.

                  (c) For purposes of this Section 2, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the Corporation, in which
the shareholders of the Corporation receive distributions in cash or securities
of another corporation or corporations as a result of such consolidation or
merger, any transaction or series of related transactions to which the Company
is a party in which excess of fifty percent (50%) of the Company's voting power
is transferred, or a sale of all or substantially all of the assets of the
Corporation (collectively, a "Change in Control"), shall be treated as a
liquidation, dissolution or winding up of the Corporation.

         Any securities to be delivered to the holders of the Preferred pursuant
to this subsection (c) shall be valued as follows:

                           (i) Securities not subject to investment letter or
other similar restrictions on free marketability:


<PAGE>

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

                                    (B) If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid prices over the
30-day period ending three (3) days prior to the closing; and

                                    (C) If there is no active public market, the
value shall be the fair market value thereof, as determined in good faith by the
Board of Directors of the Corporation.

                           (ii) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be to make
an appropriate discount from the market value determined as above in (i)(A),(B)
or (C) to reflect the approximate fair market value thereof, as determined in
good faith by the Board of Directors of the Corporation.

         The Corporation shall give each holder of record of shares of Preferred
written notice of an impending transaction described in this subsection 2(c) not
later than twenty (20) days prior to the shareholders meeting called to approve
such transaction, or twenty (20) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this section 2(c) and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of shares of
Preferred Stock which is entitled to such notice rights or similar notice rights
and which represents at least a majority of the voting power of all then
outstanding shares of such shares of Preferred Stock.

                  (d) As authorized by Section 402.5(c) of the California
Corporations Code, the provisions of Sections 502 and 503 of the California
Corporations Code shall not apply with respect to repurchase by the Corporation
of shares of Common Stock issued to or held by employees or consultants of the
Corporation or its subsidiaries upon termination of their employment or services
pursuant to agreement providing for the right of said repurchase.

         3. VOTING RIGHTS.

                  (a) Except as otherwise required by law or by Section 3(b)
hereof, the holder of each share of Common Stock issued and outstanding shall
have one vote and each holder of shares of Preferred shall be entitled to the
number of votes equal to the number of shares of Common Stock into which such
shares of Preferred could be converted at the record date for determination of
the shareholders entitled to vote on such matters, or, if no such record date is
established, at the date such vote is taken or any written consent of
shareholders is solicited, such 


<PAGE>

votes to be counted together with all other shares of stock of the Corporation
having general voting power and not separately as a class except as otherwise
provided herein or by law. Fractional votes by the holders of Preferred shall
not, however, be permitted and any fractional voting rights shall (after
aggregating all shares into which shares of the Preferred held by each holder
could be converted) be rounded to the nearest whole number. Holders of Common
Stock and the Preferred shall be entitled to notice of any shareholders' meeting
in accordance with the Bylaws of the Corporation.

                  (b) Notwithstanding Section 3(a) above, the Class B Common
shall not have any voting rights except as required by law.

                  (c) At each annual or special meeting called for the purpose
of electing directors, the holders of Series E Preferred, voting together as a
class, shall be entitled to elect one (1) director of the Corporation, the
holders of Series H Preferred, voting together as a class, shall be entitled to
elect one (1) director of the Corporation and the holders of Series K Preferred,
voting together as a class, shall be entitled to elect one (1) director of the
Corporation. Subject to the restrictions of Section 3(b) above, all remaining
directors shall be elected by the holders of the Common Stock and the Preferred
Stock (on an as-converted basis) voting together as a single class. In the case
of a vacancy in the office of director elected by the holders of (i) Series E
Preferred, (ii) Series H Preferred, or (iii) Series K Preferred, a successor
shall be elected to hold office for the unexpired term of such director by the
affirmative vote of the majority of the shares of such holders of (i) Series E
Preferred, (ii) Series H Preferred, or (iii) Series K Preferred, respectively.
In the case of any vacancies in the office of the remaining directors elected by
holders of the Common Stock and the Preferred Stock (on an as-converted basis),
voting together as a class, any successor shall be elected to hold office for
the unexpired term of such director by the affirmative vote of the majority of
the shares of such holders of Common and Preferred Stock. Subject to Section 303
of the California Corporations Code, any director who shall have been elected by
holders of (i) Series E Preferred, (ii) Series H Preferred, (iii) Series K
Preferred, or (iv) Common Stock and Preferred Stock, may be removed during the
aforesaid term of office, either for or without cause by, and only by, the
affirmative vote of the holders of a majority of (i) Series E Preferred, (ii)
Series H Preferred, (iii) Series K Preferred, or (iv) Common Stock and Preferred
Stock, respectively, given at a special meeting of the shareholders duly called
or by an action by written consent for that purpose, and any such vacancy
thereby created may be filled by the vote of the holders of a majority of (i)
Series E Preferred, (ii) Series H Preferred, (iii) Series K Preferred, or (iv)
Common Stock and Preferred Stock, respectively, at such meeting or in such
consent.

         4. CONVERSION. The holders of the Preferred have conversion rights as
follows (the "Conversion Rights"):

                  (a) RIGHT TO CONVERT. Each share of Series A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred, Series E Preferred, Series
F Preferred, Series G Preferred, Series H Preferred, Series J Preferred and
Series K Preferred shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share at the office of the
Corporation or any transfer agent for the Preferred, into such number of fully
paid and 


<PAGE>

nonassessable shares of Class A Common as is determined by dividing the
Conversion Price for such series of Preferred (determined as hereinafter
provided) in effect at the time of the conversion into the "Conversion Value"
per share of such series of Preferred. The number of shares of Class A Common
into which each series of Preferred is convertible is hereinafter referred to as
the "Conversion Rate" for such series. The Conversion Price per share of (i)
Series A Preferred shall be $0.25, (ii) Series B Preferred shall be $0.375,
(iii) Series C Preferred shall be $0.60, (iv) Series D Preferred shall be
$1.085, (v) Series E Preferred shall be $3.30, (vi) Series F Preferred shall be
$5.555874, (vii) Series G Preferred shall be $6.15, (viii) Series H Preferred
shall be $3.68, (ix) Series J Preferred shall be $14.03274, and (x) Series K
Preferred shall be $9.50. The Conversion Value per share of (i) Series A
Preferred shall be $0.25, (ii) Series B Preferred shall be $0.375, (iii) Series
C Preferred shall be $0.60, (iv) Series D Preferred shall be $1.085, (v) Series
E Preferred shall be $3.30, (vi) Series F Preferred shall be $6.15, (vii) Series
G Preferred shall be $6.15, (viii) Series H Preferred shall be $3.68, (ix)
Series J Preferred shall be $14.03274, and (x) Series K Preferred shall be
$9.50. The Conversion Price for each series of Preferred shall be subject to
adjustment as hereinafter provided.

                  (b) AUTOMATIC CONVERSION. Each share of Preferred shall
automatically be converted into shares of Class A Common at the then effective
Conversion Price upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Corporation to the public (an "Initial Public Offering") at a
price per share (prior to deduction of underwriter commissions and offering
expenses) of not less than $7.36 per share (appropriately adjusted for any stock
dividends, stock splits, combinations, recapitalizations or similar events) and
an aggregate offering price to the public of not less than $10,000,000 (prior to
deduction of underwriter commissions and offering expenses).

                  (c) MECHANICS OF CONVERSION. No fractional shares of Common
Stock shall be issued upon conversion of shares of Preferred. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder of Preferred shall be entitled to
convert the same into full shares of Common Stock and to receive certificates
therefor, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Preferred, and shall give written notice to the Corporation at such office that
he elects to convert the same; provided, however, that in the event of an
automatic conversion pursuant to Section 4(b), the outstanding shares of
Preferred shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent, and provided
further that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such automatic conversion
unless the certificates evidencing such shares of Preferred are either delivered
to the Corporation or its transfer agent as provided above, or the holder
notifies the Corporation or its transfer agent that such certificates have been
lost, stolen or destroyed and executes an agreement reasonably satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with the theft, loss or destruction of such certificates. The
Corporation shall, as soon as practicable after delivery of such certificates,
or such agreement and indemnification in the 


<PAGE>

case of a lost certificate, issue and deliver at such office to such holder of
Preferred, a certificate or certificates for the number of shares of Common
Stock to which he shall be entitled as aforesaid and a check payable to the
holder in the amount of any cash amounts payable as the result of a conversion
into fractional shares of Common Stock. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the shares of Preferred to be converted, or in the case of
automatic conversion on the date of closing of the offering, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.

                  (d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTIVE ISSUES.

                           (i) SPECIAL DEFINITIONS. For purposes of this Section
4(d), the following definitions shall apply:

                                    (1) "OPTIONS" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.

                                    (2) "ORIGINAL ISSUE DATE" shall mean June
11, 1996.

                                    (3) "CONVERTIBLE SECURITIES" shall mean any
evidences of indebtedness, shares (other than the Common Stock) or other
securities convertible into or exchangeable for Common Stock.

                                    (4) "ADDITIONAL SHARES OF COMMON STOCK"
shall mean all shares of Common Stock issued (or, pursuant to Section 4(d)(ii),
deemed to be issued) by the Corporation after the Original Issue Date, other
than shares of Common Stock issued or issuable at any time:

                                             (A) upon conversion of the shares
of Preferred authorized herein;

                                             (B) (i) to officers, directors, and
employees of, and consultants to, the Corporation to be designated pursuant to
plans and arrangements approved by the Board of Directors; and (ii) to lending
or leasing institutions approved by the Board of Directors, provided that the
aggregate of (i) and (ii) do not exceed more that 4,058,821 shares (net of
shares repurchased and Options expiring unexercised), appropriately adjusted for
stock splits, combinations, stock dividends, recapitalizations, or similar
events (provided that any shares repurchased by the Corporation from employees,
officers, directors and consultants pursuant to the terms of stock repurchase
agreements approved by the Board of Directors, or Options which terminate
unexercised, shall not, unless reissued, be counted as issued for purposes of
this calculation);

                                             (C) as a dividend or distribution
on Preferred or any event for which adjustment is made pursuant to Section 4(e)
hereof;


<PAGE>

                                             (D) by way of dividend or other
distribution on shares of Common Stock excluded from the definition of
Additional Shares of Common Stock by the foregoing clauses (A), (B), or (C).

                           (ii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON
STOCK. In the event the Corporation at any time or from time to time after the
Original Issue Date shall issue any Options or Convertible Securities or shall
fix a record date for the determination of holders of any class of securities
entitled to receive any such Options or Convertible Securities, then the maximum
number of shares (as set forth in the instrument relating thereto assuming the
satisfaction of any conditions to exercisability, including without limitation,
the passage of time and without regard to any provisions contained therein for a
subsequent adjustment of such number) of Common Stock issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to Section 4(d)(iv) hereof) of such Additional Shares of Common Stock
would be less than the Conversion Price for such series in effect on the date of
and immediately prior to such issue, or such record date, as the case may be,
and provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:

                                    (1) no further adjustment in the Conversion
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;

                                    (2) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase or decrease in the consideration payable to the Corporation, or in
the number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Conversion Price computed upon the original issue thereof
(or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                                    (3) upon the expiration of any such Options
or any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration, be
recomputed as if,

                                             (A) in the case of Convertible
Securities or Options for Common Stock, the only Additional Shares of Common
Stock issued were shares of Common Stock, if any, actually issued upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was the consideration 


<PAGE>

actually received by the Corporation for the issue of all such Options, 
whether or not exercised, plus the consideration actually received by the 
Corporation upon such exercise, or for the issue of all such Convertible 
Securities which were actually converted or exchanged, plus the additional 
consideration, if any, actually received by the Corporation upon such 
conversion or exchange, and

                                            (B) in the case of Options for
Convertible Securities, only the Convertible Securities, if any, actually issued
upon the exercise thereof were issued at the time of issue of such Options, and
the consideration received by the Corporation for the Additional Shares of
Common Stock deemed to have been then issued was the consideration actually
received by the Corporation for the issue of all such Options, whether or not
exercised, plus the consideration deemed to have been received by the
Corporation upon the issue of the Convertible Securities with respect to which
such Options were actually exercised;

                                    (4) no readjustment pursuant to clause (2)
or (3) above shall have the effect of increasing the Conversion Price to an
amount which exceeds the lower of (i) the Conversion Price on the original
adjustment date, or (ii) the Conversion Price that would have resulted from any
issuance of Additional Shares of Common Stock between the original adjustment
date and such readjustment date; and

                                    (5) in the case of any Options which expire
by their terms not more than 90 days after the date of issue thereof, no
adjustment of the Conversion Price shall be made until the expiration or
exercise of all such Options.

                            (iii) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE
OF ADDITIONAL SHARES OF COMMON STOCK.

                                    (1) SERIES E PREFERRED, SERIES F 
PREFERRED AND SERIES H PREFERRED, SERIES J PREFERRED AND SERIES K PREFERRED. 
In the event the Corporation shall issue Additional Shares of Common Stock 
(including Additional Shares of Common Stock deemed to be issued pursuant to 
Section 4(d)(ii)) after the Original Issue Date without consideration or for 
consideration per share less than the Conversion Price for (i) the Series E 
Preferred, (ii) the Series F Preferred, (iii) the Series H Preferred, (iv) 
the Series J Preferred, and/or (v) Series K Preferred, in effect on the date 
of and immediately prior to such issue, then and in such event, the 
Conversion Price for the (i) Series E Preferred, (ii) Series F Preferred, 
(iii) Series H Preferred, (iv) Series J Preferred, and/or (v) Series K 
Preferred, if the applicable consideration per share is less than the 
Conversion Price then in effect for such series of Series Preferred, shall be 
reduced, concurrently with such issue, to a price determined by multiplying 
such Conversion Price by a fraction, the numerator of which shall be the 
number of shares of Common Stock outstanding immediately prior to such issue 
(including all shares of Common Stock issuable upon conversion of the 
outstanding shares of Preferred and all shares of Common Stock reserved for 
future issuance by the Board of Directors of the Corporation) plus the number 
of shares of Common Stock which the aggregate consideration received by the 
Corporation for the total number of Additional Shares of Common Stock so 
issued would purchase at such Conversion Price; and the denominator of which 
shall be the number of shares of Common Stock outstanding immediately 


<PAGE>

prior to such issue (including all shares of Common Stock issuable upon 
conversion of the outstanding shares of Preferred and all shares of Common 
Stock reserved for future issuance by the Board of Directors of the 
Corporation) plus the number of such Additional Shares of Common Stock so 
issued. In the event the Conversion Price for the Series K Preferred shall be 
adjusted as a result of this Section 4(d)(iii), the Minimum Price (as defined 
below) shall also be adjusted by the same fraction used to adjust the 
Conversion Price for the Series K Preferred.

                                    (2) SERIES G PREFERRED. In the event the
Corporation shall issue Additional Shares of Common Stock (including Additional
Shares of Common Stock deemed to be issued pursuant to Section 4(d)(ii)) after
the Original Issue Date and on or prior to September 30, 1995 (the "Trigger
Date"), without consideration or for consideration per share less than the
Conversion Price for the Series G Preferred in effect on the date of and
immediately prior to such issue, then and in such event, the Conversion Price
for the Series G Preferred shall be reduced, concurrently with such issue, to a
price equal to the amount of consideration received by the Corporation per share
in such issuance. In the event this Corporation shall issue Additional Shares of
Common Stock (including Additional Shares of Common Stock deemed to be issued
pursuant to Section 4(d)(ii)) after the Trigger Date without consideration or
for consideration per share less than the Conversion Price of the Series G
Preferred in effect on the date of and immediately prior to such issue, then in
such event, the Conversion Price of Series G Preferred shall be reduced,
concurrently with such issue, to a price determined by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue (including
all shares of Common Stock issuable upon conversion of the outstanding Preferred
Stock and all shares of Common Stock received for future issuance by the Board
of Directors of the Corporation) plus the number of shares of Common Stock which
the aggregate consideration received by the Corporation for the total number of
Additional Shares of Common Stock so issued would purchase at such Conversion
Price; and the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue (including all shares of
Common Stock issuable upon conversion of the outstanding Preferred Stock and all
shares of Common Stock reserved for future issuance by the Board of Directors of
the Corporation) plus the number of such Additional Shares of Common Stock so
issued.

                                    (3) SERIES J PREFERRED. In the event the
Corporation shall undertake an Initial Public Offering at certain per share
prices set forth below (appropriately adjusted for any stock dividends, stock
splits, combinations, recapitalizations or similar events), the Series J
Preferred will undergo a Conversion Price adjustment. If the price per share to
the public in the Initial Public Offering is equal to or less than $11.22 and
higher than $9.82, the Conversion Price will be adjusted to $12.38345 per share.
If the price per share to the public in the Initial Public Offering is equal to
or less than $9.82 and higher than $8.42, the Conversion Price will be adjusted
to $11.69611 per share. If the price per share to the public in the Initial
Public Offering is equal to or less than $8.42 and higher than $7.02, the
Conversion Price will be adjusted to $11.07622 per share. If the price per share
to the public in the Initial Public Offering is equal to or less than $7.02, the
Conversion Price will be adjusted to $10.52310 per share.


<PAGE>

                                    (4) SERIES K PREFERRED. In the event of (i)
an Initial Public Offering, (ii) a liquidation, dissolution, or winding up of
the Corporation, either voluntary or involuntary or (iii) a Change of Control
(collectively, a "Liquidity Event"), during the time periods and at the per
share prices set forth below (appropriately adjusted for any stock dividends,
stock splits, combinations, recapitalizations or similar events), the Series K
Preferred will undergo a Conversion Price adjustment. If the price per share (on
an if-as-converted to Common Stock basis) in the Liquidity Event (the "Liquidity
Price") is less than $21.11 per share, and the Liquidity Event occurs prior to
the first anniversary of the first issuance date of the Series K Preferred (the
"Series K Issuance Date"), the Conversion Price for the Series K Preferred will
be adjusted to forty-five percent (45%) of the Liquidity Price. If the Liquidity
Price is less than $27.14 per share and the Liquidity Event occurs after the
first anniversary and prior to the second anniversary of the Series K Issuance
Date, the Conversion Price will be adjusted to thirty-five percent (35%) of the
Liquidity Price. If the Liquidity Price is less than $38.00 per share and the
Liquidity Event occurs after the second anniversary of the Series K Issuance
Date, the Conversion Price will be adjusted to twenty-five percent (25%) of the
Liquidity Price. Notwithstanding the foregoing, in no event shall the minimum
Conversion price per share of the Series K Preferred be adjusted below $5.00 per
share (appropriately adjusted under Section 4(d)(iii)(1) and for any stock
dividends, stock splits, combinations, recapitalizations or similar events) (the
"Minimum Price").

                           (iv) DETERMINATION OF CONSIDERATION. For purposes of
this Section 4(d), the consideration received by the Corporation for the issue
of any Additional Shares of Common Stock shall be computed as follows:

                                    (1) CASH AND PROPERTY. Such consideration
shall:

                                             (A) insofar as it consists of cash,
be computed at the aggregate amount of cash received by the Corporation
excluding amounts paid or payable for accrued interest or accrued dividends;

                                             (B) insofar as it consists of
property other than cash, be computed at the fair value thereof at the time of
such issue, as determined in good faith by the Board irrespective of any
accounting treatment; and

                                             (C) in the event Additional Shares
of Common Stock are issued together with other shares or securities or other
assets of the Corporation for consideration which covers both, be the proportion
of such consideration so received, computed as provided in clauses (A) and (B)
above, as determined in good faith by the Board.

                                    (2) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 4(d)(ii), relating
to Options and Convertible Securities, shall be determined by dividing


<PAGE>

                                             (x) the total amount, if any,
received or receivable by the Corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by

                                             (y) the maximum number of shares of
Common Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.

                           (e) ADJUSTMENTS TO CONVERSION PRICE.

                                    (i) ADJUSTMENTS FOR STOCK DIVIDENDS,
SUBDIVISIONS, COMBINATIONS OR CONSOLIDATION OF COMMON STOCK. In the event the
outstanding shares of Common Stock shall be, after the Original Issue Date,
subdivided (by stock split or otherwise) into a greater number of shares of
Common Stock, or the Corporation shall declare or pay any dividend on the Common
Stock payable in Common Stock, the Conversion Price for each series then in
effect shall, concurrently with the effectiveness of such subdivision or stock
dividend, be proportionately decreased based on the ratio of (i) the number of
shares of Common Stock outstanding immediately prior to such subdivision or
stock dividend to (ii) the number of shares of Common Stock outstanding
immediately after such subdivision or stock dividend. In the event the
outstanding shares of Common Stock shall, after the Original Issue Date, be
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares of Common Stock, the Conversion Price for each series then in effect
shall, concurrently with the effectiveness of such combination or consolidation,
be proportionately increased on the same basis as set forth above.

                                    (ii) ADJUSTMENTS FOR OTHER DISTRIBUTIONS. In
the event the Corporation at any time or from time to time, after the Original
Issue Date, makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive any distribution payable in securities of the
Corporation other than shares of Common Stock and other than as otherwise
adjusted in this Section 4 or as otherwise provided in Section 2, then and in
each such event provision shall be made so that the holders of Preferred shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Corporation which
they would have received had their shares of Preferred been converted into
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the date of conversion,
retained such securities receivable by them as aforesaid during such period,
subject to all other adjustments called for during such period under this
Section 4 with respect to the rights of the holders of the Preferred.


<PAGE>

                                    (iii) ADJUSTMENTS FOR RECLASSIFICATION,
EXCHANGE AND SUBSTITUTION. If the Common Stock issuable upon conversion of
shares of Preferred shall, after the Original Issue Date, be changed into the
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares provided for above), the Conversion Price
then in effect shall, concurrently with the effectiveness of such reorganization
or reclassification, be proportionately adjusted such that the shares of
Preferred shall be convertible into, in lieu of the number of shares of Common
Stock which the holders would otherwise have been entitled to receive, a number
of shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would have been subject to receipt by the holders
upon conversion of the Preferred immediately before that change.

                           (f) NO IMPAIRMENT. Except as permitted by Section 6,
the Corporation will not, by amendment of its Articles of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of Preferred against impairment, including
setting aside and reserving for future issuance upon conversion of the
outstanding shares of Preferred the number of shares of Common Stock issuable
upon such conversion.

                           (g) CERTIFICATE AS TO ADJUSTMENTS. Upon the
occurrence of each adjustment or readjustment of the Conversion Price for a
series of Preferred pursuant to this Section 4, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of such series of Preferred a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any holder of such series of
Preferred, furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion Price
in effect at the time for such series, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of such series of Preferred.

                           (h) NOTICES OF RECORD DATE. In the event that the
Corporation shall propose at any time:

                                    (i) to declare any dividend or distribution
upon its Common Stock, whether in cash, property, stock or other securities,
whether or not a regular cash dividend and whether or not out of earnings or
earned surplus;

                                    (ii) to offer for subscription pro rata to
the holders of any class or series of its stock any additional shares of stock
of any class or series or any other similar rights;


<PAGE>

                                    (iii) to effect any reclassification or
recapitalization of its Common Stock outstanding which results in a change in
the Common Stock; or

                                    (iv) to merge or consolidate with or into
any other corporation, or sell, lease or convey all or substantially all its
property or business, or to liquidate, dissolve or wind up;

                                    Then, in connection with each such event,
the Corporation shall send to the holders of the Preferred:

                                             (1) at least 20 days' prior written
notice of the date on which a record shall be taken for such dividend,
distribution or subscription rights (and specifying the date on which the
holders of Common Stock shall be entitled thereto) or for determining rights to
vote on the matters referred to in (iii) and (iv) above; and

                                             (2) in the case of the matters
referred to in (iii) and (iv) above, at least 20 days' prior written notice of
the date when the same shall take place and specifying the date on which the
holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon the occurrence of such event or
the record date for the determination of such holders if such record date is
earlier.

         Each such written notice shall be delivered personally or given by
first class mail, postage prepaid, addressed to the holders of the Preferred at
the address for each such holder as shown on the books of the Corporation.

         5. REDEMPTION OF SERIES J PREFERRED.

                  (a) At the option of the holder thereof to be exercised not
less than sixty (60) days prior to the date of first redemption, the Corporation
shall redeem, from any source of funds legally available therefor, the Series J
Preferred in ten equal quarterly installments beginning not earlier than
December 31, 1998, and continuing thereafter on the same day of the month, on a
quarterly basis, (each a "Series J Redemption Date") until the remaining Series
J Preferred outstanding shall be redeemed. The Corporation shall effect such
redemptions on the applicable Series J Preferred Redemption by paying in cash in
exchange for the shares of Series J Preferred to be redeemed a sum equal to
$14.03274 per share of Series J Preferred (as adjusted for any stock dividends,
combinations or splits or other adjustments pursuant to Section 4 with respect
to such shares) plus all declared but unpaid dividends on such shares (the
"Series J Redemption Price").

                  (b) The Corporation shall also pay interest on the outstanding
balance due with respect to the Series J Redemption Price, to begin accruing on
the first Series J Redemption Date, at 9 1/2% per annum and to be payable with
each subsequent installment ("Series J Interest Payment"). The Series J Interest
Payment for each quarter shall be calculated as the number of Series J Preferred
then outstanding times the Series J Redemption Price times 1/4 times .095.


<PAGE>

                  (c) At least 10 but not more than 20 days prior to each Series
J Redemption Date written notice shall be mailed, first class postage prepaid,
to the holder of record (at the close of business on the business day next
preceding the day on which notice is given) of the Series J Preferred to be
redeemed, at the address last shown on the records of the Corporation for such
holder, notifying such holder of the redemption to be effected, specifying the
number of shares to be redeemed from such holder, the Series J Redemption Date,
the Series J Redemption Price, the place at which payment may be obtained and
calling upon such holder to surrender to the Corporation, in the manner and at
the place designated, his certificate or certificates representing the shares to
be redeemed (the "Redemption Notice"). On or after the Redemption Date, such
holder shall surrender to the Corporation the certificate or certificates
representing such shares, in the manner and at the place designated in the
Redemption Notice, and thereupon the Series J Redemption Price of such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall promptly be issued
representing the unredeemed shares.

                  (d) From and after the Series J Redemption Date, unless there
shall have been a default in payment of the Redemption Price, all rights of the
holder of shares of Series J Preferred designated for redemption in the
Redemption Notice as holder of Series J Preferred shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose whatsoever. If
the funds of the Corporation legally available for redemption of shares of
Series J Preferred on any Redemption Date are insufficient to redeem the total
number of shares of Series J Preferred to be redeemed on such date and pay the
Series J Redemption Price, those funds which are legally available will be used
to redeem the maximum possible number of such shares to be redeemed. The shares
of Series J Preferred not redeemed shall remain outstanding and shall be
entitled to all the rights and preferences provided herein. The Series J
Redemption Prices to the extent not paid when due shall accrue interest in
accordance with the terms hereof every quarter until paid. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of shares of Series J Preferred such funds will immediately be
used to redeem the balance of the shares which the Corporation has become
obliged to redeem on any Redemption Date, but which it has not redeemed, and pay
any amounts owed for Series J Redemption Prices and Interest Payments.

                  (e) On or prior to each Redemption Date, the Corporation shall
deposit the Series J Preferred Redemption Price of all shares of Series J
Preferred designated for redemption in the Redemption Notice and not yet
redeemed plus the Series J Interest Payment due with respect thereto or so much
thereof as is then legally available in accordance with Section 5(d), with a
bank or trust corporation having aggregate capital and surplus in excess of
$100,000,000 as a trust fund for the benefit of the holder of the shares
designated for redemption and not yet redeemed, with irrevocable instructions
and authority to the bank or trust corporation to pay the Series J Redemption
Price for such shares to their respective holders on or after the Redemption
Date upon receipt of notification from the Corporation that such holder has
surrendered his share certificate to the Corporation pursuant to Section (c)
above. For each 


<PAGE>

Series J Redemption Date, unless otherwise provided in Section 5(d) above, the
deposit shall constitute full payment of the shares to their holders, and from
and after Series J Redemption Date the shares so called for redemption shall be
redeemed and shall be deemed to be no longer outstanding, and the holder thereof
shall cease to be shareholder with respect thereto except the rights to receive
from the bank or trust corporation payment of the Series J Redemption Price of
the shares, without interest, upon surrender of their certificates therefor.
Such instructions shall also provide that any moneys deposited by the
Corporation pursuant to this Section 5(e) for the redemption of shares
thereafter converted into shares of the Corporation's Common Stock hereof prior
to the Redemption Date shall be returned to the Corporation forthwith upon such
conversion. The balance of any moneys deposited by the Corporation pursuant to
this Section 5(e) remaining unclaimed at the expiration of two (2) years
following each Series J Redemption Date shall thereafter be returned to the
Corporation upon its request expressed in a resolution of its Board of
Directors.

         6. COVENANTS. In addition to any other rights provided by law, so long
as any shares of Preferred shall be outstanding, the Corporation shall not,
without first obtaining the affirmative vote or written consent of the holders
of not less than a majority of the outstanding shares of a series of Preferred:

                  (a) amend or repeal any provision of, or add any provision to,
the Corporation's Articles of Incorporation if such action would materially and
adversely directly alter or change the preferences, rights, or privileges of
such series of Preferred;

                  (b) increase or decrease the authorized number of shares of
such series of Preferred;

                  (c) authorize, issue, or enter into any agreement providing
for the issuance of any capital stock or other equity security which is senior
to such series of Preferred with respect to the payment of dividends,
redemption, or distribution upon liquidation; or

                  (d) redeem, purchase, or otherwise acquire any of the
Corporation's capital stock or other equity securities other than (i) shares of
Common Stock repurchased at cost from terminated employees or consultants
pursuant to contractual arrangements, or (ii) shares of Preferred redeemed
pursuant to the terms of the Articles of Incorporation of the Corporation.

         In addition to any other rights provided by law, so long as any shares
of Preferred shall be outstanding, the Corporation shall not, without first
obtaining the affirmative vote or written consent of the holders of a majority
of the outstanding shares of Preferred, voting together as a single class
(including the Series J Preferred):

                           (a) sell or convey all or substantially all of its
property or business or merge into or consolidate with any other corporation if
immediately after such merger or consolidation the shareholders of the
Corporation shall hold less than 50% of the voting power of the surviving
corporation; or


<PAGE>

                           (b) liquidate, dissolve, or effect a recapitalization
or reorganization of the Corporation.

                                        V

         The liability of the directors of the Corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law. The
Corporation is also authorized, to the fullest extent permissible under
California law, to indemnify its agents (as defined in Section 317 of the
California Corporations Code), whether by bylaw, agreement or otherwise, for
breach of duty to the Corporation and its shareholders in excess of that
expressly permitted by Section 317 and to advance defense expenses to its agents
in connection with such matters as they are incurred. If, after the effective
date of this Article, California law is amended in a manner which permits a
corporation to limit the monetary or other liability of its directors or to
authorize indemnification of, or advancement of such defense expenses to, its
directors or other persons, in any such case to a greater extent than is
permitted on such effective date, the references in this Article to "California
law" shall to that extent be deemed to refer to California law as so amended."

         3. The foregoing Amendment and Restatement of Articles of Incorporation
has been duly approved by the Board of Directors.

         4. The foregoing Amendment and Restatement of Articles of Incorporation
has been duly approved by the required vote of shareholders in accordance with
Section 902 and Section 903 of the Corporations Code.

         5. The total number of outstanding shares of Common Stock of the
Corporation is 2,605,135, and the total number of outstanding shares of (i)
Series A Preferred is 480,000, (ii) Series B Preferred is 320,666, (iii) Series
C Preferred is 1,700,000, (iv) Series D Preferred is 1,309,484, (v) Series E
Preferred is 1,965,262, (vi) Series F Preferred is 1,948,090, (vii) Series G
Preferred is zero, (viii) Series H Preferred is 3,804,346 (ix) Series I
Preferred Stock is zero and (x) Series J Preferred is 1,081,200. The number of
shares voting in favor of Amendment and Restatement equaled or exceeded the vote
required. The percentage vote required was (i) more than 50% of the Common Stock
voting as a class and (ii) more than 50% of the Preferred Stock voting together
as a class."


<PAGE>

         We further declare under penalty of perjury that the matters set forth
in the foregoing certificate are true and correct of our own knowledge.

         Executed at Palo Alto, California, this 5th day of January 2000.


                                       By: /s/ Randall Lipps       
                                          -------------------------------------
                                                Randall Lipps
                                                Chairman of the Board

                                       By:
                                           ------------------------------------
                                                Robert J. Brigham
                                                Assistant Secretary


<PAGE>

We further declare under penalty of perjury that the matters set forth in the
foregoing certificate are true and correct of our own knowledge.

         Executed at Palo Alto, California, this 5th day of January 2000.

                                       By:
                                          -------------------------------------
                                                Randall Lipps
                                                Chairman of the Board

                                       By:   /s/ Robert J. Brigham    
                                          -------------------------------------
                                                Robert J. Brigham
                                                Assistant Secretary



<PAGE>

                           CERTIFICATE OF AMENDMENT OF

                AMENDED AND RESTATED ARTICLES OF INCORPORATION OF

                                  OMNICELL.COM

         Randall  Lipps and Robert J. Brigham certify that:

         1. They are the Chairman of the Board and Assistant Secretary,
respectively, of OMNICELL.COM, a California corporation.

         2. Article III of the Amended and Restated Articles of Incorporation of
this corporation is amended to read in full as follows:

                                      "III

                  The Corporation is authorized to issue two classes of shares
         to be designated respectively Common Stock and Preferred Stock. The
         total number of shares of Common Stock the Corporation shall have
         authority to issue is 35,000,000 and the total number of shares of
         Preferred Stock the Corporation shall have authority to issue is
         18,500,000. The Preferred Stock may be issued from time to time in one
         or more series. The Board of Directors is authorized to fix the number
         of shares of any series of Preferred Stock and, subject to the rights
         of existing shareholders set forth in Article IV, Section 6, to
         determine or alter the rights, preferences, privileges, and
         restrictions granted to or imposed upon any wholly unissued series of
         Preferred Stock and, within the limits and restrictions stated in any
         resolution or resolutions
 of the Board of Directors originally fixing
         the number of shares constituting any series of Preferred Stock, to
         increase or decrease (but not below the number of shares of any such
         series then outstanding) the number of shares of any such series
         subsequent to the issue of shares of that series (subject to the
         provisions of Section 6 of Article IV hereof).

                  The Common Stock shall be divided into two series, to be
         designated, respectively, Class A Voting Common Stock, consisting of
         32,500,000 shares ("Class A Common"), and Class B Non-voting Common
         Stock, consisting of 2,500,000 shares ("Class B Common").

                  The first series of Preferred Stock shall be designated Series
         A Preferred Stock ("Series A Preferred") and shall consist of 480,000
         shares. The second series of Preferred Stock shall be designated Series
         B Preferred Stock ("Series B Preferred") and shall consist of 320,666
         shares. The third series of Preferred Stock shall be designated Series
         C Preferred Stock ("Series C Preferred") and shall consist of 1,700,000
         shares. The fourth series of Preferred Stock shall be designated Series
         D Preferred Stock ("Series D Preferred") and shall consist of 1,328,000
         shares. The fifth series of Preferred Stock shall be designated Series
         E Preferred Stock ("Series E Preferred") and shall consist of 1,966,000
         shares. The sixth series of Preferred Stock shall be designated Series
         F Preferred Stock 


<PAGE>

         ("Series F Preferred") and shall consist of 2,000,000 shares. The
         seventh series of Preferred Stock shall be designated Series G
         Preferred Stock ("Series G Preferred") and shall consist of 1,000,000
         shares. The eighth series of Preferred Stock shall be designated Series
         H Preferred Stock ("Series H Preferred") and shall consist of 4,000,000
         shares. The ninth series of Preferred Stock shall be designated Series
         J Preferred Stock ("Series J Preferred") and shall consist of 1,802,000
         shares. The tenth series of Preferred Stock shall be designated Series
         K Preferred Stock ("Series K Preferred") and shall consist of 3,157,895
         shares. The Series A Preferred, the Series B Preferred, the Series C
         Preferred, the Series D Preferred, the Series E Preferred, the Series F
         Preferred, Series G Preferred, Series H Preferred, Series J Preferred
         and Series K Preferred shall be referred to as the "Preferred". "

         3. The foregoing Amendment and Restatement of Articles of Incorporation
has been duly approved by the Board of Directors.

         4. The foregoing Amendment and Restatement of Articles of Incorporation
has been duly approved by the required vote of shareholders in accordance with
Section 902 and Section 903 of the Corporations Code.

         5. The total number of outstanding shares of Common Stock of the
Corporation is 2,605,135, and the total number of outstanding shares of (i)
Series A Preferred is 480,000, (ii) Series B Preferred is 320,666, (iii) Series
C Preferred is 1,700,000, (iv) Series D Preferred is 1,309,484, (v) Series E
Preferred is 1,965,262, (vi) Series F Preferred is 1,948,090, (vii) Series G
Preferred is zero, (viii) Series H Preferred is 3,804,346, (ix) Series I
Preferred Stock is zero, (x) Series J Preferred is 1,081,200 and (xi) Series K
Preferred is 2,105,263. The number of shares voting in favor of Amendment and
Restatement equaled or exceeded the vote required. The percentage vote required
was (i) more than 50% of the Common Stock voting as a class and (ii) more than
50% of the Preferred Stock voting together as a class."


<PAGE>

We further declare under penalty of perjury that the matters set forth in the
foregoing certificate are true and correct of our own knowledge.

         Executed at Palo Alto, California, this 3 day of MARCH 2000.


                                          By:   /s/ Randall Lipps
                                             ---------------------------
                                                   Randall Lipps
                                                   Chairman of the Board

                                          By:   /s/ Robert J. Brigham
                                             ---------------------------
                                                   Robert J. Brigham
                                                   Assistant Secretary




<PAGE>

                                                                    EXHIBIT 3.3


                         CERTIFICATE OF INCORPORATION OF

                           OMNICELL MERGER CORPORATION


         The undersigned, a natural person (the "Sole Incorporator"), for the 
purpose of organizing a corporation to conduct the business and promote the 
purposes hereinafter stated, under the provisions and subject to the 
requirements of the laws of the State of Delaware hereby certifies that:

                                       I.

         The name of this corporation is Omnicell Merger Corporation.

                                       II.

         The address of the registered office of the corporation in the State 
of Delaware is 1013 Centre Road, City of Wilmington, 19805, County of New 
Castle and the name of the registered agent of the corporation in the State 
of Delaware at such address is Corporation Service Company.

                                      III.

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

                                       IV.

         The Corporation is authorized to issue two classes of shares to be 
designated respectively Common Stock and Preferred Stock. The total number of 
shares of Common Stock the Corporation
 shall have authority to issue is 
50,000,000, each having a par value of one-tenth of one cent ($.001) and the 
total number of shares of Preferred Stock the Corporation shall have 
authority to issue is 18,500,000, each having a par value of one-tenth of one 
cent ($.001).

         The Preferred Stock may be issued from time to time in one or more 
series. The Board of Directors is authorized to fix the number of shares of 
any series of Preferred Stock and, subject to the rights of existing 
shareholders set forth in Article V, Section 6, to determine or alter the 
rights, preferences, privileges, and restrictions granted to or imposed upon 
any wholly unissued series of Preferred Stock and, within the limits and 
restrictions stated in any resolution or resolutions of the Board of 
Directors originally fixing the number of shares constituting any series of 
Preferred Stock, to increase or decrease (but not below the number of shares 
of any such series then outstanding) the number of shares of any such series 
subsequent to the issue of shares of that series (subject to the provisions 
of Section 6 of Article V hereof).


<PAGE>

         The Common Stock shall be divided into two series, to be designated, 
respectively, Class A Voting Common Stock, consisting of 47,500,000 shares 
("Class A Common"), and Class B Non-voting Common Stock, consisting of 
2,500,000 shares ("Class B Common").

         The first series of Preferred Stock shall be designated Series A 
Preferred Stock ("Series A Preferred") and shall consist of 480,000 shares. 
The second series of Preferred Stock shall be designated Series B Preferred 
Stock ("Series B Preferred") and shall consist of 320,666 shares. The third 
series of Preferred Stock shall be designated Series C Preferred Stock 
("Series C Preferred") and shall consist of 1,700,000 shares. The fourth 
series of Preferred Stock shall be designated Series D Preferred Stock 
("Series D Preferred") and shall consist of 1,328,000 shares. The fifth 
series of Preferred Stock shall be designated Series E Preferred Stock 
("Series E Preferred") and shall consist of 1,966,000 shares. The sixth 
series of Preferred Stock shall be designated Series F Preferred Stock 
("Series F Preferred") and shall consist of 2,000,000 shares. The seventh 
series of Preferred Stock shall be designated Series G Preferred Stock 
("Series G Preferred") and shall consist of 1,000,000 shares. The eighth 
series of Preferred Stock shall be designated Series H Preferred Stock 
("Series H Preferred") and shall consist of 4,000,000 shares. The ninth 
series of Preferred Stock shall be designated Series J Preferred Stock 
("Series J Preferred") and shall consist of 1,802,000 shares. The tenth 
series of Preferred Stock shall be designated Series K Preferred Stock 
("Series K Preferred") and shall consist of 3,157,895 shares. The eleventh 
series of Preferred Stock shall be designated Series L Preferred Stock 
("Series L Preferred") and shall consist of 526,316 shares. The remaining 
219,123 shares of Preferred Stock are not yet designated. The Series A 
Preferred, the Series B Preferred, the Series C Preferred, the Series D 
Preferred, the Series E Preferred, the Series F Preferred, Series G 
Preferred, Series H Preferred, Series J Preferred, Series K Preferred and 
Series L Preferred shall be referred to as the "Preferred."

                                       V.

The relative rights, preferences, privileges and restrictions granted to or 
imposed on the respective classes of the shares of capital stock or the 
holders thereof are as follows:

         1.       DIVIDENDS.

                  (a) The holders of the Series J Preferred shall be entitled 
to receive in any fiscal year, when and as declared by the Board of 
Directors, out of any assets legally available therefore, dividends in cash 
at an annual rate of $1.12 per share (as adjusted for any stock dividends, 
combinations, consolidations or splits with respect to such shares). The 
right to such dividends shall not be cumulative and no right shall accrue to 
holders of Series J Preferred by reason of the fact that dividends on such 
shares were not declared in any prior year, nor shall any undeclared 
dividends bear or accrue interest. Such dividends shall be prior and in 
preference to any declaration or payment of any dividend, (payable other than 
in common stock) on the Series A Preferred, Series B Preferred, Series C 
Preferred, Series D Preferred, Series E Preferred, Series F Preferred, Series 
G Preferred, Series H Preferred, Series K Preferred, Series L Preferred, or 
Common Stock. No dividend may be paid on the Series A Preferred, the Series B 
Preferred, the Series C Preferred, the Series D Preferred, the Series E 
Preferred, the Series F Preferred, the Series G Preferred, the Series H 
Preferred, the Series K Preferred, the Series L Preferred or the Common Stock 
unless and until any and all dividends have been paid to the Series J 
Preferred.


                                       2


<PAGE>

                  (b) After payment of all required dividends required to the 
holders of Series J Preferred, the holders of outstanding Series A Preferred, 
Series B Preferred, Series C Preferred, Series D Preferred, Series E 
Preferred, Series F Preferred, Series G Preferred, Series H Preferred, Series 
K Preferred, and Series L Preferred shall be entitled to receive in any 
fiscal year, when and as declared by the Board of Directors, out of any 
assets at the time legally available therefor, dividends in cash at an annual 
rate of $0.02 per share of Series A Preferred, $0.03 per share of Series B 
Preferred, $0.048 per share of Series C Preferred, $0.085 per share of Series 
D Preferred, $0.265 per share of Series E Preferred, $0.49 per share of 
Series F Preferred, $0.49 per share of Series G Preferred, $0.29 per share of 
Series H Preferred, $0.76 per share of Series K Preferred, and $0.76 per 
share of Series L Preferred (as adjusted for any stock dividends, 
combinations, consolidations or splits with respect to such shares). Such 
dividends may be payable quarterly or otherwise as the Board of Directors may 
from time to time determine. The right to such dividends shall not be 
cumulative and no right shall accrue to holders of such Preferred by reason 
of the fact that dividends on such shares were not declared in any prior 
year, nor shall any undeclared dividends bear or accrue interest.

                  (c) Any partial payment of such dividends to the holders of 
the Series A Preferred, Series B Preferred, Series C Preferred, Series D 
Preferred, Series E Preferred, Series F Preferred, Series G Preferred, Series 
H Preferred, Series K Preferred and Series L Preferred shall be made in 
proportion to the amount each such holder would be entitled to receive as set 
forth above if such amounts were paid in full. Dividends other than dividends 
payable solely in Common Stock may be declared or paid upon shares of Common 
Stock in any fiscal year of the Corporation only if dividends at the annual 
rates set forth above shall have been paid or declared and set apart upon all 
shares of Preferred for such fiscal year. No dividend shall be declared or 
paid with respect to the Common Stock unless at the same time an equivalent 
dividend is declared or paid with respect to the Preferred on an 
as-if-converted to Common Stock basis. Any declared but unpaid dividends on 
the Preferred shall be paid upon the conversion of such shares into Common 
Stock either (at the option of the Corporation) by payment of cash or by the 
issuance of additional shares of Common Stock based upon the fair market 
value of the Common Stock at the time of conversion, as determined by the 
Board of Directors. No dividend payable in Common Stock shall be declared or 
paid with respect to any series of Preferred unless at the same time a 
similar dividend is declared or paid to all series of Preferred on an 
as-if-converted to Common Stock basis, such that the holders of no series of 
Preferred shall hold a greater proportion of the Corporation's Common Stock 
following such dividend (on an as-if converted basis) than immediately prior 
to such dividend.

         2. LIQUIDATION PREFERENCE. In the event of any liquidation, 
dissolution, or winding up of the Corporation, either voluntary or 
involuntary, distributions to the shareholders of the Corporation shall be 
made in the following manner:

                  (a) Holders of the Series J Preferred shall be entitled to 
receive, prior and in preference to any distribution of any of the assets or 
surplus funds of the Corporation to the holders of the Series A Preferred, 
Series B Preferred, Series C Preferred, Series D Preferred, Series E 
Preferred, Series F Preferred, Series G Preferred, Series H Preferred, Series 
K Preferred, Series L Preferred or Common Stock by reason of their ownership 
thereof, the amount of $14.03274 per share (as adjusted for any stock 
dividends, combinations, consolidations or splits with respect to such 
shares), plus all accrued or declared but unpaid dividends on such share for 
each share of Series J Preferred then held by them. If the assets and funds 
thus distributed among the holders of Series J Preferred shall be 
insufficient to permit the payment to such 


                                       3


<PAGE>

holders of the full aforesaid preferential amount, then the entire assets and 
funds of the Corporation legally available for distribution shall be 
distributed among the holders of Series J Preferred in proportion to the full 
preferential amount each such holder is otherwise entitled to receive.

                  (b) Subject to the payment in full of the liquidation 
preferences with respect to the Series J Preferred as provided in Section 
2(a) above, the holders of the Series A Preferred, Series B Preferred, Series 
C Preferred, Series D Preferred, Series E Preferred, Series F Preferred, 
Series G Preferred, Series H Preferred, Series K Preferred and Series L 
Preferred shall be entitled to receive, prior and in preference to any 
distribution of any of the assets or surplus funds of the Corporation to the 
holders of the Common Stock by reason of their ownership of such stock, the 
amount of $0.25 per share for each share of Series A Preferred then held by 
them, $0.375 per share for each share of Series B Preferred then held by 
them, $0.60 per share for each share of Series C Preferred then held by them, 
$1.085 per share for each share of Series D Preferred then held by them, 
$3.30 per share of Series E Preferred then held by them, $6.15 per share of 
Series F Preferred then held by them, $6.15 per share of Series G Preferred 
then held by them, $3.68 per share of Series H Preferred then held by them, 
for the holders of Series K Preferred, the greater of (i) $9.50 per share of 
Series K Preferred, then held by such holder and (ii) the amount per share of 
Series K Preferred, that such holder would have received if they had 
converted their Series K Preferred shares into Common Stock immediately prior 
to the liquidation, and for the holders of Series L Preferred, $9.50 per 
share of Series L Preferred then held by them, adjusted for any stock 
dividends, combinations, consolidations, or splits with respect to such 
shares and, in addition, an amount equal to all declared but unpaid dividends 
on the Series A Preferred, Series B Preferred, Series C Preferred, Series D 
Preferred, Series E Preferred, Series F Preferred, Series G Preferred, Series 
H Preferred Series K Preferred and Series L Preferred. If the assets and 
funds thus distributed among the holders of Preferred shall be insufficient 
to permit the payment to such holders of the full aforesaid preferential 
amount, then the entire assets and funds of the Corporation remaining after 
payment in full of the liquidation preference set forth in Section 2(a) and 
legally available for distribution shall be distributed among the holders of 
Preferred in proportion to the full preferential amount each such holder is 
otherwise entitled to receive. After payment has been made to the holders of 
Preferred of the full amounts to which they shall be entitled as aforesaid, 
the holders of the Common Stock shall be entitled to receive ratably on a 
per-share basis all the remaining assets.

         (c) For purposes of this Section 2, a merger or consolidation of the 
Corporation with or into any other corporation or corporations, or the merger 
of any other corporation or corporations into the Corporation, in which the 
shareholders of the Corporation receive distributions in cash or securities 
of another corporation or corporations as a result of such consolidation or 
merger, any transaction or series of related transactions to which the 
Company is a party in which excess of fifty percent (50%) of the Company's 
voting power is transferred, or a sale of all or substantially all of the 
assets of the Corporation (collectively, a "Change in Control"), shall be 
treated as a liquidation, dissolution or winding up of the Corporation.

         Any securities to be delivered to the holders of the Preferred 
pursuant to this subsection (c) shall be valued as follows:

                           (i) Securities not subject to investment letter or
other similar restrictions on free marketability:


                                       4


<PAGE>

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

                                    (B) If actively traded over-the-counter, 
the value shall be deemed to be the average of the closing bid prices over 
the 30-day period ending three (3) days prior to the closing; and

                                    (C) If there is no active public market, 
the value shall be the fair market value thereof, as determined in good faith 
by the Board of Directors of the Corporation.

                           (ii) The method of valuation of securities subject 
to investment letter or other restrictions on free marketability shall be to 
make an appropriate discount from the market value determined as above in 
(i)(A),(B) or (C) to reflect the approximate fair market value thereof, as 
determined in good faith by the Board of Directors of the Corporation.

         The Corporation shall give each holder of record of shares of 
Preferred written notice of an impending transaction described in this 
subsection 2(c) not later than twenty (20) days prior to the shareholders 
meeting called to approve such transaction, or twenty (20) days prior to the 
closing of such transaction, whichever is earlier, and shall also notify such 
holders in writing of the final approval of such transaction. The first of 
such notices shall describe the material terms and conditions of the 
impending transaction and the provisions of this section 2(c) and the 
Corporation shall thereafter give such holders prompt notice of any material 
changes. The transaction shall in no event take place sooner than twenty (20) 
days after the Corporation has given the first notice provided for herein or 
sooner than ten (10) days after the corporation has given notice of any 
material changes provided for herein; provided, however, that such periods 
may be shortened upon the written consent of the holders of shares of 
Preferred Stock which is entitled to such notice rights or similar notice 
rights and which represents at least a majority of the voting power of all 
then outstanding shares of such shares of Preferred Stock.

                           (d) As authorized by Section 402.5(c) of the 
California Corporations Code, the provisions of Sections 502 and 503 of the 
California Corporations Code shall not apply with respect to repurchase by 
the Corporation of shares of Common Stock issued to or held by employees or 
consultants of the Corporation or its subsidiaries upon termination of their 
employment or services pursuant to agreement providing for the right of said 
repurchase.

         3.       VOTING RIGHTS.

                  (a) Except as otherwise required by law or by Section 3(b) 
hereof, the holder of each share of Common Stock issued and outstanding shall 
have one vote and each holder of shares of Preferred shall be entitled to the 
number of votes equal to the number of shares of Common Stock into which such 
shares of Preferred could be converted at the record date for determination 
of the shareholders entitled to vote on such matters, or, if no such record 
date is established, at the date such vote is taken or any written consent of 
shareholders is solicited, such votes to be counted together with all other 
shares of stock of the Corporation having general voting power and not 
separately as a class except as otherwise provided herein or by law. 


                                       5


<PAGE>

Fractional votes by the holders of Preferred shall not, however, be permitted 
and any fractional voting rights shall (after aggregating all shares into 
which shares of the Preferred held by each holder could be converted) be 
rounded to the nearest whole number. Holders of Common Stock and the 
Preferred shall be entitled to notice of any shareholders' meeting in 
accordance with the Bylaws of the Corporation.

                  (b) Notwithstanding Section 3(a) above, the Class B Common 
shall not have any voting rights except as required by law.

                  (c) At each annual or special meeting called for the 
purpose of electing directors, the holders of Series E Preferred, voting 
together as a class, shall be entitled to elect one (1) director of the 
Corporation, the holders of Series H Preferred, voting together as a class, 
shall be entitled to elect one (1) director of the Corporation and the 
holders of Series K Preferred, voting together as a class, shall be entitled 
to elect one (1) director of the Corporation. Subject to the restrictions of 
Section 3(b) above, all remaining directors shall be elected by the holders 
of the Common Stock and the Preferred Stock (on an as-converted basis) voting 
together as a single class. In the case of a vacancy in the office of 
director elected by the holders of (i) Series E Preferred, (ii) Series H 
Preferred, or (iii) Series K Preferred, a successor shall be elected to hold 
office for the unexpired term of such director by the affirmative vote of the 
majority of the shares of such holders of (i) Series E Preferred, (ii) Series 
H Preferred, or (iii) Series K Preferred, respectively. In the case of any 
vacancies in the office of the remaining directors elected by holders of the 
Common Stock and the Preferred Stock (on an as-converted basis), voting 
together as a class, any successor shall be elected to hold office for the 
unexpired term of such director by the affirmative vote of the majority of 
the shares of such holders of Common and Preferred Stock. Subject to Section 
303 of the California Corporations Code, any director who shall have been 
elected by holders of (i) Series E Preferred, (ii) Series H Preferred, (iii) 
Series K Preferred, or (iv) Common Stock and Preferred Stock, may be removed 
during the aforesaid term of office, either for or without cause by, and only 
by, the affirmative vote of the holders of a majority of (i) Series E 
Preferred, (ii) Series H Preferred, (iii) Series K Preferred, or (iv) Common 
Stock and Preferred Stock, respectively, given at a special meeting of the 
shareholders duly called or by an action by written consent for that purpose, 
and any such vacancy thereby created may be filled by the vote of the holders 
of a majority of (i) Series E Preferred, (ii) Series H Preferred, (iii) 
Series K Preferred, or (iv) Common Stock and Preferred Stock, respectively, 
at such meeting or in such consent.

         4. CONVERSION. The holders of the Preferred have conversion rights 
as follows (the "Conversion Rights"):

                  (a) RIGHT TO CONVERT. Each share of Series A Preferred, 
Series B Preferred, Series C Preferred, Series D Preferred, Series E 
Preferred, Series F Preferred, Series G Preferred, Series H Preferred, Series 
J Preferred, Series K Preferred and Series L Preferred shall be convertible, 
at the option of the holder thereof, at any time after the date of issuance 
of such share at the office of the Corporation or any transfer agent for the 
Preferred, into such number of fully paid and nonassessable shares of Class A 
Common as is determined by dividing the Conversion Price for such series of 
Preferred (determined as hereinafter provided) in effect at the time of the 
conversion into the "Conversion Value" per share of such series of Preferred. 
The number of shares of Class A Common into which each series of Preferred is 
convertible is 


                                       6


<PAGE>

hereinafter referred to as the "Conversion Rate" for such series. The 
Conversion Price per share of (i) Series A Preferred shall be $0.25, (ii) 
Series B Preferred shall be $0.375, (iii) Series C Preferred shall be $0.60, 
(iv) Series D Preferred shall be $1.085, (v) Series E Preferred shall be 
$3.30, (vi) Series F Preferred shall be $5.555874, (vii) Series G Preferred 
shall be $6.15, (viii) Series H Preferred shall be $3.68, (ix) Series J 
Preferred shall be $14.03274, (x) Series K Preferred shall be $9.50, and (xi) 
Series L Preferred shall be $9.50. The Conversion Value per share of (i) 
Series A Preferred shall be $0.25, (ii) Series B Preferred shall be $0.375, 
(iii) Series C Preferred shall be $0.60, (iv) Series D Preferred shall be 
$1.085, (v) Series E Preferred shall be $3.30, (vi) Series F Preferred shall 
be $6.15, (vii) Series G Preferred shall be $6.15, (viii) Series H Preferred 
shall be $3.68, (ix) Series J Preferred shall be $14.03274, (x) Series K 
Preferred shall be $9.50, and (xi) Series L Preferred shall be $9.50. The 
Conversion Price for each series of Preferred shall be subject to adjustment 
as hereinafter provided.

                  (b) AUTOMATIC CONVERSION. Each share of Preferred shall 
automatically be converted into shares of Class A Common at the then 
effective Conversion Price upon the closing of a firm commitment underwritten 
public offering pursuant to an effective registration statement under the 
Securities Act of 1933, as amended, covering the offer and sale of Common 
Stock for the account of the Corporation to the public (an "Initial Public 
Offering") at a price per share (prior to deduction of underwriter 
commissions and offering expenses) of not less than $7.36 per share 
(appropriately adjusted for any stock dividends, stock splits, combinations, 
recapitalizations or similar events) and an aggregate offering price to the 
public of not less than $10,000,000 (prior to deduction of underwriter 
commissions and offering expenses).

                  (c) MECHANICS OF CONVERSION. No fractional shares of Common 
Stock shall be issued upon conversion of shares of Preferred. In lieu of any 
fractional shares to which the holder would otherwise be entitled, the 
Corporation shall pay cash equal to such fraction multiplied by the then 
effective Conversion Price. Before any holder of Preferred shall be entitled 
to convert the same into full shares of Common Stock and to receive 
certificates therefor, he shall surrender the certificate or certificates 
therefor, duly endorsed, at the office of the Corporation or of any transfer 
agent for the Preferred, and shall give written notice to the Corporation at 
such office that he elects to convert the same; provided, however, that in 
the event of an automatic conversion pursuant to Section 4(b), the 
outstanding shares of Preferred shall be converted automatically without any 
further action by the holders of such shares and whether or not the 
certificates representing such shares are surrendered to the Corporation or 
its transfer agent, and provided further that the Corporation shall not be 
obligated to issue certificates evidencing the shares of Common Stock 
issuable upon such automatic conversion unless the certificates evidencing 
such shares of Preferred are either delivered to the Corporation or its 
transfer agent as provided above, or the holder notifies the Corporation or 
its transfer agent that such certificates have been lost, stolen or destroyed 
and executes an agreement reasonably satisfactory to the Corporation to 
indemnify the Corporation from any loss incurred by it in connection with the 
theft, loss or destruction of such certificates. The Corporation shall, as 
soon as practicable after delivery of such certificates, or such agreement 
and indemnification in the case of a lost certificate, issue and deliver at 
such office to such holder of Preferred, a certificate or certificates for 
the number of shares of Common Stock to which he shall be entitled as 
aforesaid and a check payable to the holder in the amount of any cash amounts 
payable as the result of a conversion into fractional shares of Common Stock. 
Such conversion shall be deemed to have been made immediately prior to the 
close of business on the date of such surrender of the 


                                       7.


<PAGE>

shares of Preferred to be converted, or in the case of automatic conversion 
on the date of closing of the offering, and the person or persons entitled to 
receive the shares of Common Stock issuable upon such conversion shall be 
treated for all purposes as the record holder or holders of such shares of 
Common Stock on such date.

                  (d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTIVE ISSUES.

                           (i) SPECIAL DEFINITIONS. For purposes of this 
Section 4(d), the following definitions shall apply:

                                    (1) "OPTIONS" shall mean rights, options 
or warrants to subscribe for, purchase or otherwise acquire either Common 
Stock or Convertible Securities.

                                    (2) "ORIGINAL ISSUE DATE" shall mean June 
11, 1996.

                                    (3) "CONVERTIBLE SECURITIES" shall mean 
any evidences of indebtedness, shares (other than the Common Stock) or other 
securities convertible into or exchangeable for Common Stock.

                                    (4) "ADDITIONAL SHARES OF COMMON STOCK" 
shall mean all shares of Common Stock issued (or, pursuant to Section 
4(d)(ii), deemed to be issued) by the Corporation after the Original Issue 
Date, other than shares of Common Stock issued or issuable at any time:

                                             (A) upon conversion of the 
shares of Preferred authorized herein;

                                             (B) (i) to officers, directors, 
and employees of, and consultants to, the Corporation to be designated 
pursuant to plans and arrangements approved by the Board of Directors; and 
(ii) to lending or leasing institutions approved by the Board of Directors, 
provided that the aggregate of (i) and (ii) do not exceed more that 4,058,821 
shares (net of shares repurchased and Options expiring unexercised), 
appropriately adjusted for stock splits, combinations, stock dividends, 
recapitalizations, or similar events (provided that any shares repurchased by 
the Corporation from employees, officers, directors and consultants pursuant 
to the terms of stock repurchase agreements approved by the Board of 
Directors, or Options which terminate unexercised, shall not, unless 
reissued, be counted as issued for purposes of this calculation);

                                             (C) as a dividend or 
distribution on Preferred or any event for which adjustment is made pursuant 
to Section 4(e) hereof;

                                             (D) by way of dividend or other 
distribution on shares of Common Stock excluded from the definition of 
Additional Shares of Common Stock by the foregoing clauses (A), (B), or (C).

                           (ii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON 
STOCK. In the event the Corporation at any time or from time to time after 
the Original Issue Date shall issue any Options or Convertible Securities or 
shall fix a record date for the determination of holders 


                                       8.


<PAGE>

of any class of securities entitled to receive any such Options or 
Convertible Securities, then the maximum number of shares (as set forth in 
the instrument relating thereto assuming the satisfaction of any conditions 
to exercisability, including without limitation, the passage of time and 
without regard to any provisions contained therein for a subsequent 
adjustment of such number) of Common Stock issuable upon the exercise of such 
Options or, in the case of Convertible Securities and Options therefor, the 
conversion or exchange of such Convertible Securities, shall be deemed to be 
Additional Shares of Common Stock issued as of the time of such issue or, in 
case such a record date shall have been fixed, as of the close of business on 
such record date, provided that Additional Shares of Common Stock shall not 
be deemed to have been issued unless the consideration per share (determined 
pursuant to Section 4(d)(iv) hereof) of such Additional Shares of Common 
Stock would be less than the Conversion Price for such series in effect on 
the date of and immediately prior to such issue, or such record date, as the 
case may be, and provided further that in any such case in which Additional 
Shares of Common Stock are deemed to be issued:

                                    (1) no further adjustment in the 
Conversion Price shall be made upon the subsequent issue of Convertible 
Securities or shares of Common Stock upon the exercise of such Options or 
conversion or exchange of such Convertible Securities;

                                    (2) if such Options or Convertible 
Securities by their terms provide, with the passage of time or otherwise, for 
any increase or decrease in the consideration payable to the Corporation, or 
in the number of shares of Common Stock issuable, upon the exercise, 
conversion or exchange thereof, the Conversion Price computed upon the 
original issue thereof (or upon the occurrence of a record date with respect 
thereto), and any subsequent adjustments based thereon, shall, upon any such 
increase or decrease becoming effective, be recomputed to reflect such 
increase or decrease insofar as it affects such Options or the rights of 
conversion or exchange under such Convertible Securities;

                                    (3) upon the expiration of any such 
Options or any rights of conversion or exchange under such Convertible 
Securities which shall not have been exercised, the Conversion Price computed 
upon the original issue thereof (or upon the occurrence of a record date with 
respect thereto), and any subsequent adjustments based thereon, shall, upon 
such expiration, be recomputed as if,

                                             (A) in the case of Convertible 
Securities or Options for Common Stock, the only Additional Shares of Common 
Stock issued were shares of Common Stock, if any, actually issued upon the 
exercise of such Options or the conversion or exchange of such Convertible 
Securities and the consideration received therefor was the consideration 
actually received by the Corporation for the issue of all such Options, 
whether or not exercised, plus the consideration actually received by the 
Corporation upon such exercise, or for the issue of all such Convertible 
Securities which were actually converted or exchanged, plus the additional 
consideration, if any, actually received by the Corporation upon such 
conversion or exchange, and

                                             (B) in the case of Options for 
Convertible Securities, only the Convertible Securities, if any, actually 
issued upon the exercise thereof were issued at the time of issue of such 
Options, and the consideration received by the Corporation for the 


                                       9.


<PAGE>

Additional Shares of Common Stock deemed to have been then issued was the 
consideration actually received by the Corporation for the issue of all such 
Options, whether or not exercised, plus the consideration deemed to have been 
received by the Corporation upon the issue of the Convertible Securities with 
respect to which such Options were actually exercised;

                                    (4) no readjustment pursuant to clause 
(2) or (3) above shall have the effect of increasing the Conversion Price to 
an amount which exceeds the lower of (i) the Conversion Price on the original 
adjustment date, or (ii) the Conversion Price that would have resulted from 
any issuance of Additional Shares of Common Stock between the original 
adjustment date and such readjustment date; and

                                    (5) in the case of any Options which 
expire by their terms not more than 90 days after the date of issue thereof, 
no adjustment of the Conversion Price shall be made until the expiration or 
exercise of all such Options.

                           (iii) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE 
OF ADDITIONAL SHARES OF COMMON STOCK.

                                    (1) SERIES E PREFERRED, SERIES F 
PREFERRED AND SERIES H PREFERRED, SERIES J PREFERRED SERIES K PREFERRED AND 
SERIES L PREFERRED. In the event the Corporation shall issue Additional 
Shares of Common Stock (including Additional Shares of Common Stock deemed to 
be issued pursuant to Section 4(d)(ii)) after the Original Issue Date without 
consideration or for consideration per share less than the Conversion Price 
for (i) the Series E Preferred, (ii) the Series F Preferred, (iii) the Series 
H Preferred, (iv) the Series J Preferred, (v) Series K Preferred, and/or (vi) 
Series L Preferred in effect on the date of and immediately prior to such 
issue, then and in such event, the Conversion Price for the (i) Series E 
Preferred, (ii) Series F Preferred, (iii) Series H Preferred, (iv) Series J 
Preferred, (v) Series K Preferred, and/or (vi) Series L Preferred if the 
applicable consideration per share is less than the Conversion Price then in 
effect for such series of Series Preferred, shall be reduced, concurrently 
with such issue, to a price determined by multiplying such Conversion Price 
by a fraction, the numerator of which shall be the number of shares of Common 
Stock outstanding immediately prior to such issue (including all shares of 
Common Stock issuable upon conversion of the outstanding shares of Preferred 
and all shares of Common Stock reserved for future issuance by the Board of 
Directors of the Corporation) plus the number of shares of Common Stock which 
the aggregate consideration received by the Corporation for the total number 
of Additional Shares of Common Stock so issued would purchase at such 
Conversion Price; and the denominator of which shall be the number of shares 
of Common Stock outstanding immediately prior to such issue (including all 
shares of Common Stock issuable upon conversion of the outstanding shares of 
Preferred and all shares of Common Stock reserved for future issuance by the 
Board of Directors of the Corporation) plus the number of such Additional 
Shares of Common Stock so issued. In the event the Conversion Price for the 
Series K Preferred shall be adjusted as a result of this Section 4(d)(iii), 
the Minimum Price (as defined below) shall also be adjusted by the same 
fraction used to adjust the Conversion Price for the Series K Preferred.

                                    (2) SERIES G PREFERRED. In the event the 
Corporation shall issue Additional Shares of Common Stock (including 
Additional Shares of Common Stock deemed to be issued pursuant to Section 
4(d)(ii)) after the Original Issue Date and on or prior to 


                                       10.


<PAGE>

September 30, 1995 (the "Trigger Date"), without consideration or for 
consideration per share less than the Conversion Price for the Series G 
Preferred in effect on the date of and immediately prior to such issue, then 
and in such event, the Conversion Price for the Series G Preferred shall be 
reduced, concurrently with such issue, to a price equal to the amount of 
consideration received by the Corporation per share in such issuance. In the 
event this Corporation shall issue Additional Shares of Common Stock 
(including Additional Shares of Common Stock deemed to be issued pursuant to 
Section 4(d)(ii)) after the Trigger Date without consideration or for 
consideration per share less than the Conversion Price of the Series G 
Preferred in effect on the date of and immediately prior to such issue, then 
in such event, the Conversion Price of Series G Preferred shall be reduced, 
concurrently with such issue, to a price determined by multiplying such 
Conversion Price by a fraction, the numerator of which shall be the number of 
shares of Common Stock outstanding immediately prior to such issue (including 
all shares of Common Stock issuable upon conversion of the outstanding 
Preferred Stock and all shares of Common Stock received for future issuance 
by the Board of Directors of the Corporation) plus the number of shares of 
Common Stock which the aggregate consideration received by the Corporation 
for the total number of Additional Shares of Common Stock so issued would 
purchase at such Conversion Price; and the denominator of which shall be the 
number of shares of Common Stock outstanding immediately prior to such issue 
(including all shares of Common Stock issuable upon conversion of the 
outstanding Preferred Stock and all shares of Common Stock reserved for 
future issuance by the Board of Directors of the Corporation) plus the number 
of such Additional Shares of Common Stock so issued.

                                    (3) SERIES J PREFERRED. In the event the 
Corporation shall undertake an Initial Public Offering at certain per share 
prices set forth below (appropriately adjusted for any stock dividends, stock 
splits, combinations, recapitalizations or similar events), the Series J 
Preferred will undergo a Conversion Price adjustment. If the price per share 
to the public in the Initial Public Offering is equal to or less than $11.22 
and higher than $9.82, the Conversion Price will be adjusted to $12.38345 per 
share. If the price per share to the public in the Initial Public Offering is 
equal to or less than $9.82 and higher than $8.42, the Conversion Price will 
be adjusted to $11.69611 per share. If the price per share to the public in 
the Initial Public Offering is equal to or less than $8.42 and higher than 
$7.02, the Conversion Price will be adjusted to $11.07622 per share. If the 
price per share to the public in the Initial Public Offering is equal to or 
less than $7.02, the Conversion Price will be adjusted to $10.52310 per share.

                                    (4) SERIES K PREFERRED. In the event of 
(i) an Initial Public Offering, (ii) a liquidation, dissolution, or winding 
up of the Corporation, either voluntary or involuntary or (iii) a Change of 
Control (collectively, a "Liquidity Event"), during the time periods and at 
the per share prices set forth below (appropriately adjusted for any stock 
dividends, stock splits, combinations, recapitalizations or similar events), 
the Series K Preferred will undergo a Conversion Price adjustment. If the 
price per share (on an if-as-converted to Common Stock basis) in the 
Liquidity Event (the "Liquidity Price") is less than $21.11 per share, and 
the Liquidity Event occurs prior to the first anniversary of the first 
issuance date of the Series K Preferred (the "Series K Issuance Date"), the 
Conversion Price for the Series K Preferred will be adjusted to forty-five 
percent (45%) of the Liquidity Price. If the Liquidity Price is less than 
$27.14 per share and the Liquidity Event occurs after the first anniversary 
and prior to the second anniversary of the Series K Issuance Date, the 
Conversion Price will be adjusted to thirty-five percent (35%) of the 
Liquidity Price. If the Liquidity Price is less than 


                                       11.


<PAGE>

$38.00 per share and the Liquidity Event occurs after the second anniversary 
of the Series K Issuance Date, the Conversion Price will be adjusted to 
twenty-five percent (25%) of the Liquidity Price. Notwithstanding the 
foregoing, in no event shall the minimum Conversion price per share of the 
Series K Preferred be adjusted below $5.00 per share (appropriately adjusted 
under Section 4(d)(iii)(1) and for any stock dividends, stock splits, 
combinations, recapitalizations or similar events) (the "Minimum Price").

                           (iv) DETERMINATION OF CONSIDERATION. For purposes 
of this Section 4(d), the consideration received by the Corporation for the 
issue of any Additional Shares of Common Stock shall be computed as follows:

                                    (1) CASH AND PROPERTY. Such consideration 
shall:

                                             (A) insofar as it consists of 
cash, be computed at the aggregate amount of cash received by the Corporation 
excluding amounts paid or payable for accrued interest or accrued dividends;

                                             (B) insofar as it consists of 
property other than cash, be computed at the fair value thereof at the time 
of such issue, as determined in good faith by the Board irrespective of any 
accounting treatment; and

                                             (C) in the event Additional 
Shares of Common Stock are issued together with other shares or securities or 
other assets of the Corporation for consideration which covers both, be the 
proportion of such consideration so received, computed as provided in clauses 
(A) and (B) above, as determined in good faith by the Board.

                                    (2) OPTIONS AND CONVERTIBLE SECURITIES. 
The consideration per share received by the Corporation for Additional Shares 
of Common Stock deemed to have been issued pursuant to Section 4(d)(ii), 
relating to Options and Convertible Securities, shall be determined by 
dividing

                                             (x) the total amount, if any, 
received or receivable by the Corporation as consideration for the issue of 
such Options or Convertible Securities, plus the minimum aggregate amount of 
additional consideration (as set forth in the instruments relating thereto, 
without regard to any provision contained therein for a subsequent adjustment 
of such consideration) payable to the Corporation upon the exercise of such 
Options or the conversion or exchange of such Convertible Securities, or in 
the case of Options for Convertible Securities, the exercise of such Options 
for Convertible Securities and the conversion or exchange of such Convertible 
Securities by

                                             (y) the maximum number of shares 
of Common Stock (as set forth in the instruments relating thereto, without 
regard to any provision contained therein for a subsequent adjustment of such 
number) issuable upon the exercise of such Options or the conversion or 
exchange of such Convertible Securities.



                                       12.


<PAGE>

                           (e)      ADJUSTMENTS TO CONVERSION PRICE.

                                    (i) ADJUSTMENTS FOR STOCK DIVIDENDS, 
SUBDIVISIONS, COMBINATIONS OR CONSOLIDATION OF COMMON STOCK. In the event the 
outstanding shares of Common Stock shall be, after the Original Issue Date, 
subdivided (by stock split or otherwise) into a greater number of shares of 
Common Stock, or the Corporation shall declare or pay any dividend on the 
Common Stock payable in Common Stock, the Conversion Price for each series 
then in effect shall, concurrently with the effectiveness of such subdivision 
or stock dividend, be proportionately decreased based on the ratio of (i) the 
number of shares of Common Stock outstanding immediately prior to such 
subdivision or stock dividend to (ii) the number of shares of Common Stock 
outstanding immediately after such subdivision or stock dividend. In the 
event the outstanding shares of Common Stock shall, after the Original Issue 
Date, be combined or consolidated, by reclassification or otherwise, into a 
lesser number of shares of Common Stock, the Conversion Price for each series 
then in effect shall, concurrently with the effectiveness of such combination 
or consolidation, be proportionately increased on the same basis as set forth 
above.

                                    (ii) ADJUSTMENTS FOR OTHER DISTRIBUTIONS. 
In the event the Corporation at any time or from time to time, after the 
Original Issue Date, makes, or fixes a record date for the determination of 
holders of Common Stock entitled to receive any distribution payable in 
securities of the Corporation other than shares of Common Stock and other 
than as otherwise adjusted in this Section 4 or as otherwise provided in 
Section 2, then and in each such event provision shall be made so that the 
holders of Preferred shall receive upon conversion thereof, in addition to 
the number of shares of Common Stock receivable thereupon, the amount of 
securities of the Corporation which they would have received had their shares 
of Preferred been converted into Common Stock on the date of such event and 
had they thereafter, during the period from the date of such event to and 
including the date of conversion, retained such securities receivable by them 
as aforesaid during such period, subject to all other adjustments called for 
during such period under this Section 4 with respect to the rights of the 
holders of the Preferred.

                                    (iii) ADJUSTMENTS FOR RECLASSIFICATION, 
EXCHANGE AND SUBSTITUTION. If the Common Stock issuable upon conversion of 
shares of Preferred shall, after the Original Issue Date, be changed into the 
same or a different number of shares of any other class or classes of stock, 
whether by capital reorganization, reclassification or otherwise (other than 
a subdivision or combination of shares provided for above), the Conversion 
Price then in effect shall, concurrently with the effectiveness of such 
reorganization or reclassification, be proportionately adjusted such that the 
shares of Preferred shall be convertible into, in lieu of the number of 
shares of Common Stock which the holders would otherwise have been entitled 
to receive, a number of shares of such other class or classes of stock 
equivalent to the number of shares of Common Stock that would have been 
subject to receipt by the holders upon conversion of the Preferred 
immediately before that change.

                           (f) NO IMPAIRMENT. Except as permitted by Section 
6, the Corporation will not, by amendment of its Articles of Incorporation or 
through any reorganization, transfer of assets, consolidation, merger, 
dissolution, issue or sale of securities or any other voluntary action, avoid 
or seek to avoid the observance or performance of any of the 


                                       13.


<PAGE>

terms to be observed or performed hereunder by the Corporation but will at 
all times in good faith assist in the carrying out of all the provisions of 
this Section 4 and in the taking of all such action as may be necessary or 
appropriate in order to protect the Conversion Rights of the holders of 
Preferred against impairment, including setting aside and reserving for 
future issuance upon conversion of the outstanding shares of Preferred the 
number of shares of Common Stock issuable upon such conversion.

                           (g) CERTIFICATE AS TO ADJUSTMENTS. Upon the 
occurrence of each adjustment or readjustment of the Conversion Price for a 
series of Preferred pursuant to this Section 4, the Corporation at its 
expense shall promptly compute such adjustment or readjustment in accordance 
with the terms hereof and furnish to each holder of such series of Preferred 
a certificate setting forth such adjustment or readjustment and showing in 
detail the facts upon which such adjustment or readjustment is based. The 
Corporation shall, upon the written request at any time of any holder of such 
series of Preferred, furnish or cause to be furnished to such holder a like 
certificate setting forth (i) such adjustments and readjustments, (ii) the 
Conversion Price in effect at the time for such series, and (iii) the number 
of shares of Common Stock and the amount, if any, of other property which at 
the time would be received upon the conversion of such series of Preferred.

                           (h) NOTICES OF RECORD DATE. In the event that the 
Corporation shall propose at any time:

                                    (i) to declare any dividend or 
distribution upon its Common Stock, whether in cash, property, stock or other 
securities, whether or not a regular cash dividend and whether or not out of 
earnings or earned surplus;

                                    (ii) to offer for subscription pro rata 
to the holders of any class or series of its stock any additional shares of 
stock of any class or series or any other similar rights;

                                    (iii) to effect any reclassification or 
recapitalization of its Common Stock outstanding which results in a change in 
the Common Stock; or

                                    (iv) to merge or consolidate with or into 
any other corporation, or sell, lease or convey all or substantially all its 
property or business, or to liquidate, dissolve or wind up;

                                    Then, in connection with each such event, 
the Corporation shall send to the holders of the Preferred:

                                             (1) at least 20 days' prior 
written notice of the date on which a record shall be taken for such 
dividend, distribution or subscription rights (and specifying the date on 
which the holders of Common Stock shall be entitled thereto) or for 
determining rights to vote on the matters referred to in (iii) and (iv) 
above; and

                                             (2) in the case of the matters 
referred to in (iii) and (iv) above, at least 20 days' prior written notice 
of the date when the same shall take place and specifying the date on which 
the holders of Common Stock shall be entitled to exchange their 


                                       14.


<PAGE>

Common Stock for securities or other property deliverable upon the occurrence 
of such event or the record date for the determination of such holders if 
such record date is earlier.

         Each such written notice shall be delivered personally or given by 
first class mail, postage prepaid, addressed to the holders of the Preferred 
at the address for each such holder as shown on the books of the Corporation.

         5.       REDEMPTION OF SERIES J PREFERRED.

                  (a) At the option of the holder thereof to be exercised not 
less than sixty (60) days prior to the date of first redemption, the 
Corporation shall redeem, from any source of funds legally available 
therefor, the Series J Preferred in ten equal quarterly installments 
beginning not earlier than December 31, 1998, and continuing thereafter on 
the same day of the month, on a quarterly basis, (each a "Series J Redemption 
Date") until the remaining Series J Preferred outstanding shall be redeemed. 
The Corporation shall effect such redemptions on the applicable Series J 
Preferred Redemption by paying in cash in exchange for the shares of Series J 
Preferred to be redeemed a sum equal to $14.03274 per share of Series J 
Preferred (as adjusted for any stock dividends, combinations or splits or 
other adjustments pursuant to Section 4 with respect to such shares) plus all 
declared but unpaid dividends on such shares (the "Series J Redemption 
Price").

                  (b) The Corporation shall also pay interest on the 
outstanding balance due with respect to the Series J Redemption Price, to 
begin accruing on the first Series J Redemption Date, at 9 1/2% per annUM and 
to be payable with each subsequent installment ("Series J Interest Payment"). 
The Series J Interest Payment for each quarter shall be calculated as the 
number of Series J Preferred then outstanding times the Series J Redemption 
Price times 1/4 times .095.

                  (c) At least 10 but not more than 20 days prior to each 
Series J Redemption Date written notice shall be mailed, first class postage 
prepaid, to the holder of record (at the close of business on the business 
day next preceding the day on which notice is given) of the Series J 
Preferred to be redeemed, at the address last shown on the records of the 
Corporation for such holder, notifying such holder of the redemption to be 
effected, specifying the number of shares to be redeemed from such holder, 
the Series J Redemption Date, the Series J Redemption Price, the place at 
which payment may be obtained and calling upon such holder to surrender to 
the Corporation, in the manner and at the place designated, his certificate 
or certificates representing the shares to be redeemed (the "Redemption 
Notice"). On or after the Redemption Date, such holder shall surrender to the 
Corporation the certificate or certificates representing such shares, in the 
manner and at the place designated in the Redemption Notice, and thereupon 
the Series J Redemption Price of such shares shall be payable to the order of 
the person whose name appears on such certificate or certificates as the 
owner thereof and each surrendered certificate shall be canceled. In the 
event less than all the shares represented by any such certificate are 
redeemed, a new certificate shall promptly be issued representing the 
unredeemed shares.

                  (d) From and after the Series J Redemption Date, unless 
there shall have been a default in payment of the Redemption Price, all 
rights of the holder of shares of Series J Preferred designated for 
redemption in the Redemption Notice as holder of Series J Preferred 


                                       15.


<PAGE>

shall cease with respect to such shares, and such shares shall not thereafter 
be transferred on the books of the Corporation or be deemed to be outstanding 
for any purpose whatsoever. If the funds of the Corporation legally available 
for redemption of shares of Series J Preferred on any Redemption Date are 
insufficient to redeem the total number of shares of Series J Preferred to be 
redeemed on such date and pay the Series J Redemption Price, those funds 
which are legally available will be used to redeem the maximum possible 
number of such shares to be redeemed. The shares of Series J Preferred not 
redeemed shall remain outstanding and shall be entitled to all the rights and 
preferences provided herein. The Series J Redemption Prices to the extent not 
paid when due shall accrue interest in accordance with the terms hereof every 
quarter until paid. At any time thereafter when additional funds of the 
Corporation are legally available for the redemption of shares of Series J 
Preferred such funds will immediately be used to redeem the balance of the 
shares which the Corporation has become obliged to redeem on any Redemption 
Date, but which it has not redeemed, and pay any amounts owed for Series J 
Redemption Prices and Interest Payments.

                  (e) On or prior to each Redemption Date, the Corporation 
shall deposit the Series J Preferred Redemption Price of all shares of Series 
J Preferred designated for redemption in the Redemption Notice and not yet 
redeemed plus the Series J Interest Payment due with respect thereto or so 
much thereof as is then legally available in accordance with Section 5(d), 
with a bank or trust corporation having aggregate capital and surplus in 
excess of $100,000,000 as a trust fund for the benefit of the holder of the 
shares designated for redemption and not yet redeemed, with irrevocable 
instructions and authority to the bank or trust corporation to pay the Series 
J Redemption Price for such shares to their respective holders on or after 
the Redemption Date upon receipt of notification from the Corporation that 
such holder has surrendered his share certificate to the Corporation pursuant 
to Section (c) above. For each Series J Redemption Date, unless otherwise 
provided in Section 5(d) above, the deposit shall constitute full payment of 
the shares to their holders, and from and after Series J Redemption Date the 
shares so called for redemption shall be redeemed and shall be deemed to be 
no longer outstanding, and the holder thereof shall cease to be shareholder 
with respect thereto except the rights to receive from the bank or trust 
corporation payment of the Series J Redemption Price of the shares, without 
interest, upon surrender of their certificates therefor. Such instructions 
shall also provide that any moneys deposited by the Corporation pursuant to 
this Section 5(e) for the redemption of shares thereafter converted into 
shares of the Corporation's Common Stock hereof prior to the Redemption Date 
shall be returned to the Corporation forthwith upon such conversion. The 
balance of any moneys deposited by the Corporation pursuant to this Section 
5(e) remaining unclaimed at the expiration of two (2) years following each 
Series J Redemption Date shall thereafter be returned to the Corporation upon 
its request expressed in a resolution of its Board of Directors.

         6. COVENANTS. In addition to any other rights provided by law, so 
long as any shares of Preferred shall be outstanding, the Corporation shall 
not, without first obtaining the affirmative vote or written consent of the 
holders of not less than a majority of the outstanding shares of a series of 
Preferred:

                  (a) amend or repeal any provision of, or add any provision 
to, the Corporation's Articles of Incorporation if such action would 
materially and adversely directly alter or change the preferences, rights, or 
privileges of such series of Preferred;


                                       16.


<PAGE>

                  (b) increase or decrease the authorized number of shares of 
such series of Preferred;

                  (c) authorize, issue, or enter into any agreement providing 
for the issuance of any capital stock or other equity security which is 
senior to such series of Preferred with respect to the payment of dividends, 
redemption, or distribution upon liquidation; or

                  (d) redeem, purchase, or otherwise acquire any of the 
Corporation's capital stock or other equity securities other than (i) shares 
of Common Stock repurchased at cost from terminated employees or consultants 
pursuant to contractual arrangements, or (ii) shares of Preferred redeemed 
pursuant to the terms of the Articles of Incorporation of the Corporation.

         In addition to any other rights provided by law, so long as any 
shares of Preferred shall be outstanding, the Corporation shall not, without 
first obtaining the affirmative vote or written consent of the holders of a 
majority of the outstanding shares of Preferred, voting together as a single 
class (including the Series J Preferred):

                           (a) sell or convey all or substantially all of its 
property or business or merge into or consolidate with any other corporation 
if immediately after such merger or consolidation the shareholders of the 
Corporation shall hold less than 50% of the voting power of the surviving 
corporation; or

                           (b) liquidate, dissolve, or effect a recapitalization
or reorganization of the Corporation.


                                       VI.

                  For the management of the business and for the conduct of 
the affairs of the corporation, and in further definition, limitation and 
regulation of the powers of the corporation, of its directors and of its 
stockholders or any class thereof, as the case may be, it is further provided 
that:

         A.

                  1. The management of the business and the conduct of the 
affairs of the corporation shall be vested in its Board of Directors. The 
number of directors which shall constitute the whole Board of Directors shall 
be fixed exclusively by one or more resolutions adopted by the Board of 
Directors.

                  2. BOARD OF DIRECTORS

                           a. Subject to the rights of the holders of any 
series of Preferred Stock to elect additional directors under specified 
circumstances, following the closing of the initial public offering pursuant 
to an effective registration statement under the Securities Act of 1933, as 
amended (the "1933 Act"), covering the offer and sale of Common Stock to the 
public (the "Initial Public Offering"), the directors shall be divided into 
three classes designated as Class I, Class II and Class III, respectively. 
Directors shall be assigned to each class in accordance with 


                                       17.


<PAGE>

a resolution or resolutions adopted by the Board of Directors. At the first 
annual meeting of stockholders following the closing of the Initial Public 
Offering, the term of office of the Class I directors shall expire and Class 
I directors shall be elected for a full term of three years. At the second 
annual meeting of stockholders following the Initial Public Offering, the 
term of office of the Class II directors shall expire and Class II directors 
shall be elected for a full term of three years. At the third annual meeting 
of stockholders following the Initial Public Offering, the term of office of 
the Class III directors shall expire and Class III directors shall be elected 
for a full term of three years. At each succeeding annual meeting of 
stockholders, directors shall be elected for a full term of three years to 
succeed the directors of the class whose terms expire at such annual meeting. 
During such time or times that the corporation is subject to Section 2115(b) 
of the California General Corporation Law ("CGCL"), this Section A.2.a of 
this Article VI shall become effective and be applicable only when the 
corporation is a "listed" corporation within the meaning of Section 301.5 of 
the CGCL.

                           b. In the event that the corporation is unable to 
have a classified board under applicable law, Section 301.5 of the CGCL, 
Section A. 2. a. of this Article VI shall not apply and all directors shall 
be elected at each annual meeting of stockholders to hold office until the 
next annual meeting.

                           c. No stockholder entitled to vote at an election 
for directors may cumulate votes to which such stockholder is entitled, 
unless, at the time of such election, the corporation (i) is subject to 
Section 2115(b) of the CGCL AND (ii) is not or ceases to be a "listed" 
corporation under Section 301.5 of the CGCL. During this time, every 
stockholder entitled to vote at an election for directors may cumulate such 
stockholder's votes and give one candidate a number of votes equal to the 
number of directors to be elected multiplied by the number of votes to which 
such stockholder's shares are otherwise entitled, or distribute the 
stockholder's votes on the same principle among as many candidates as such 
stockholder thinks fit. No stockholder, however, shall be entitled to so 
cumulate such stockholder's votes unless (i) the names of such candidate or 
candidates have been placed in nomination prior to the voting and (ii) the 
stockholder has given notice at the meeting, prior to the voting, of such 
stockholder's intention to cumulate such stockholder's votes. If any 
stockholder has given proper notice to cumulate votes, all stockholders may 
cumulate their votes for any candidates who have been properly placed in 
nomination. Under cumulative voting, the candidates receiving the highest 
number of votes, up to the number of directors to be elected, are elected.

         Notwithstanding the foregoing provisions of this section, each 
director shall serve until his successor is duly elected and qualified or 
until his death, resignation or removal. No decrease in the number of 
directors constituting the Board of Directors shall shorten the term of any 
incumbent director.

         3. REMOVAL OF DIRECTORS

                           a. During such time or times that the corporation 
is subject to Section 2115(b) of the CGCL, the Board of Directors or any 
individual director may be removed from office at any time without cause by 
the affirmative vote of the holders of at least a majority of the outstanding 
shares entitled to vote on such removal; provided, however, that unless the 
entire Board is removed, no individual director may be removed when the votes 
cast against such 


                                       18.


<PAGE>

director's removal, or not consenting in writing to such removal, would be 
sufficient to elect that director if voted cumulatively at an election which 
the same total number of votes were cast (or, if such action is taken by 
written consent, all shares entitled to vote were voted) and the entire 
number of directors authorized at the time of such director's most recent 
election were then being elected.

                           b. At any time or times that the corporation is 
not subject to Section 2115(b) of the CGCL and subject to any limitations 
imposed by law, Section A. 3. a. above shall no longer apply and removal 
shall be as provided in Section 141(k) of the DGCL.

         4. VACANCIES

                           a. Subject to the rights of the holders of any 
series of Preferred Stock, any vacancies on the Board of Directors resulting 
from death, resignation, disqualification, removal or other causes and any 
newly created directorships resulting from any increase in the number of 
directors, shall, unless the Board of Directors determines by resolution that 
any such vacancies or newly created directorships shall be filled by the 
stockholders, except as otherwise provided by law, be filled only by the 
affirmative vote of a majority of the directors then in office, even though 
less than a quorum of the Board of Directors, and not by the stockholders. 
Any director elected in accordance with the preceding sentence shall hold 
office for the remainder of the full term of the director for which the 
vacancy was created or occurred and until such director's successor shall 
have been elected and qualified.

                           b. If at the time of filling any vacancy or any 
newly created directorship, the directors then in office shall constitute 
less than a majority of the whole board (as constituted immediately prior to 
any such increase), the Delaware Court of Chancery may, upon application of 
any stockholder or stockholders holding at least ten percent (10%) of the 
total number of the shares at the time outstanding having the right to vote 
for such directors, summarily order an election to be held to fill any such 
vacancies or newly created directorships, or to replace the directors chosen 
by the directors then in offices as aforesaid, which election shall be 
governed by Section 211 of the DGCL.

                           c. At any time or times that the corporation is 
subject to Section 2115(b) of the CGCL, if, after the filling of any vacancy 
by the directors then in office who have been elected by stockholders shall 
constitute less than a majority of the directors then in office, then

                                    (i) Any holder or holders of an aggregate 
of five percent (5%) or more of the total number of shares at the time 
outstanding having the right to vote for those directors may call a special 
meeting of stockholders; or

                                    (ii) The Superior Court of the proper 
county shall, upon application of such stockholder or stockholders, summarily 
order a special meeting of stockholders, to be held to elect the entire 
board, all in accordance with Section 305(c) of the CGCL. The term of office 
of any director shall terminate upon that election of a successor.


                                       19.


<PAGE>

         B.

                  1. Subject to paragraph (h) of Section 43 of the Bylaws, 
the Bylaws may be altered or amended or new Bylaws adopted by the affirmative 
vote of at least sixty-six and two-thirds percent (66-2/3%) of the voting 
power of all of the then-outstanding shares of the voting stock of the 
corporation entitled to vote. The Board of Directors shall also have the 
power to adopt, amend, or repeal Bylaws.

                  2. The directors of the corporation need not be elected by 
written ballot unless the Bylaws so provide.

                  3. No action shall be taken by the stockholders of the 
corporation except at an annual or special meeting of stockholders called in 
accordance with the Bylaws or by written consent of stockholders in 
accordance with the Bylaws prior to the closing of the Initial Public 
Offering and following the closing of the Initial Public Offering no action 
shall be taken by the stockholders by written consent.

                  4. Advance notice of stockholder nominations for the 
election of directors and of business to be brought by stockholders before 
any meeting of the stockholders of the corporation shall be given in the 
manner provided in the Bylaws of the corporation.

                                      VII.

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

         B. This corporation is authorized to provide indemnification of 
agents (as defined in Section 317 of the CGCL) for breach of duty to the 
corporation and its shareholders through bylaw provisions or through 
agreements with the agents, or through shareholder resolutions, or otherwise, 
in excess of the indemnification otherwise permitted by Section 317 of the 
CGCL, subject, at any time or times the corporation is subject to Section 
2115(b) to the limits on such excess indemnification set forth in Section 204 
of the CGCL.

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

                                      VIII.

         A. The corporation reserves the right to amend, alter, change or 
repeal any provision contained in this Certificate of Incorporation, in the 
manner now or hereafter prescribed by statute, except as provided in 
paragraph B. of this Article VII, and all rights conferred upon the 
stockholders herein are granted subject to this reservation.



                                       20.


<PAGE>

         B. Notwithstanding any other provisions of this Certificate of 
Incorporation or any provision of law which might otherwise permit a lesser 
vote or no vote, but in addition to any affirmative vote of the holders of 
any particular class or series of the Voting Stock required by law, this 
Certificate of Incorporation or any Preferred Stock Designation, the 
affirmative vote of the holders of at least sixty-six and two-thirds percent 
(66-2/3%) of the voting power of all of the then-outstanding shares of the 
voting stock, voting together as a single class, shall be required to alter, 
amend or repeal Articles VI, VII, and VIII.

                                       IX.

         The name and the mailing address of the Sole Incorporator is as 
follows:

                               Sally A. Kay
                               Cooley Godward LLP
                               Five Palo Alto Square
                               3000 El Camino Real
                               Palo Alto, CA 94306

         IN WITNESS WHEREOF, this Certificate has been subscribed this 4th 
day of April, 2000 by the undersigned who affirms that the statements made 
herein are true and correct.

                                              /s/ Sally A. Kay
                                              -------------------------------
                                              SALLY A. KAY
                                              SOLE INCORPORATOR



                                       21.





<PAGE>

                                                                    EXHIBIT 3.4


                              AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                                  OMNICELL.COM


                                       I.

     The name of this corporation is Omnicell.com.

                                      II.

     The address of the registered office of the corporation in the State of 
Delaware is 1013 Centre Road, City of Wilmington, 19805, County of New Castle 
and the name of the registered agent of the corporation in the State of 
Delaware at such address is Corporation Service Company.

                                      III.

     The purpose of this corporation is to engage in any lawful act or 
activity for which a corporation may be organized under the General 
Corporation Law of the State of Delaware.

                                      IV.

     A. This corporation is authorized to issue two classes of stock to be 
designated, respectively, "Common Stock" and "Preferred Stock." The total 
number of shares which the corporation is authorized to issue is sixty-eight 
million five hundred thousand (68,500,000) shares. Fifty million (50,000,000) 
shares shall be Common Stock, each having a par value of one-tenth of one 
cent ($.001). Five million (5,000,000) shares shall be Preferred Stock, each 
having a par value of one-tenth of one cent ($.001).

     B. The Preferred Stock may be issued from time to time in one or more 
series. The Board of Directors is hereby authorized, by filing a certificate 
(a "Preferred
 Stock Designation") pursuant to the Delaware General 
Corporation Law ("DGCL"), to fix or alter from time to time the designation, 
powers, preferences and rights of the shares of each such series and the 
qualifications, limitations or restrictions of any wholly unissued series of 
Preferred Stock, and to establish from time to time the number of shares 
constituting any such series or any of them; and to increase or decrease the 
number of shares of any series subsequent to the issuance of shares of that 
series, but not below the number of shares of such series then outstanding. 
In case the number of shares of any series shall be decreased in accordance 
with the foregoing sentence, the shares constituting such decrease shall 
resume the status that they had prior to the adoption of the resolution 
originally fixing the number of shares of such series.


<PAGE>

                                       V.

     For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:

     A.

         1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed exclusively
by one or more resolutions adopted by the Board of Directors.

         2. BOARD OF DIRECTORS

               a. Subject to the rights of the holders of any series of 
Preferred Stock to elect additional directors under specified circumstances, 
following the closing of the initial public offering pursuant to an effective 
registration statement under the Securities Act of 1933, as amended (the 
"1933 Act"), covering the offer and sale of Common Stock to the public (the 
"Initial Public Offering"), the directors shall be divided into three classes 
designated as Class I, Class II and Class III, respectively. Directors shall 
be assigned to each class in accordance with a resolution or resolutions 
adopted by the Board of Directors. At the first annual meeting of 
stockholders following the closing of the Initial Public Offering, the term 
of office of the Class I directors shall expire and Class I directors shall 
be elected for a full term of three years. At the second annual meeting of 
stockholders following the Initial Public Offering, the term of office of the 
Class II directors shall expire and Class II directors shall be elected for a 
full term of three years. At the third annual meeting of stockholders 
following the Initial Public Offering, the term of office of the Class III 
directors shall expire and Class III directors shall be elected for a full 
term of three years. At each succeeding annual meeting of stockholders, 
directors shall be elected for a full term of three years to succeed the 
directors of the class whose terms expire at such annual meeting. During such 
time or times that the corporation is subject to Section 2115(b) of the 
California General Corporation Law ("CGCL"), this Section A.2.a of this 
Article V shall become effective and be applicable only when the corporation 
is a "listed" corporation within the meaning of Section 301.5 of the CGCL.

               b. In the event that the corporation is unable to have a 
classified board under applicable law, Section 301.5 of the CGCL, Section A. 
2. a. of this Article V shall not apply and all directors shall be elected at 
each annual meeting of stockholders to hold office until the next annual 
meeting.

               c. No stockholder entitled to vote at an election for 
directors may cumulate votes to which such stockholder is entitled, unless, 
at the time of such election, the corporation (i) is subject to Section 
2115(b) of the CGCL AND (ii) is not or ceases to be a "listed" corporation 
under Section 301.5 of the CGCL. During this time, every stockholder entitled 
to vote at an election for directors may cumulate such stockholder's votes 
and give one candidate a number of votes equal to the number of directors to 
be elected multiplied by the number of votes


<PAGE>

to which such stockholder's shares are otherwise entitled, or distribute the 
stockholder's votes on the same principle among as many candidates as such 
stockholder thinks fit. No stockholder, however, shall be entitled to so 
cumulate such stockholder's votes unless (i) the names of such candidate or 
candidates have been placed in nomination prior to the voting and (ii) the 
stockholder has given notice at the meeting, prior to the voting, of such 
stockholder's intention to cumulate such stockholder's votes. If any 
stockholder has given proper notice to cumulate votes, all stockholders may 
cumulate their votes for any candidates who have been properly placed in 
nomination. Under cumulative voting, the candidates receiving the highest 
number of votes, up to the number of directors to be elected, are elected.

     Notwithstanding the foregoing provisions of this section, each director 
shall serve until his successor is duly elected and qualified or until his 
death, resignation or removal. No decrease in the number of directors 
constituting the Board of Directors shall shorten the term of any incumbent 
director.

         3. REMOVAL OF DIRECTORS

               a. During such time or times that the corporation is subject 
to Section 2115(b) of the CGCL, the Board of Directors or any individual 
director may be removed from office at any time without cause by the 
affirmative vote of the holders of at least a majority of the outstanding 
shares entitled to vote on such removal; provided, however, that unless the 
entire Board is removed, no individual director may be removed when the votes 
cast against such director's removal, or not consenting in writing to such 
removal, would be sufficient to elect that director if voted cumulatively at 
an election which the same total number of votes were cast (or, if such 
action is taken by written consent, all shares entitled to vote were voted) 
and the entire number of directors authorized at the time of such director's 
most recent election were then being elected.

               b. At any time or times that the corporation is not subject to 
Section 2115(b) of the CGCL and subject to any limitations imposed by law, 
Section A. 3. a. above shall no longer apply and removal shall be as provided 
in Section 141(k) of the DGCL.

         4. VACANCIES

               a. Subject to the rights of the holders of any series of 
Preferred Stock, any vacancies on the Board of Directors resulting from 
death, resignation, disqualification, removal or other causes and any newly 
created directorships resulting from any increase in the number of directors, 
shall, unless the Board of Directors determines by resolution that any such 
vacancies or newly created directorships shall be filled by the stockholders, 
except as otherwise provided by law, be filled only by the affirmative vote 
of a majority of the directors then in office, even though less than a quorum 
of the Board of Directors, and not by the stockholders. Any director elected 
in accordance with the preceding sentence shall hold office for the remainder 
of the full term of the director for which the vacancy was created or 
occurred and until such director's successor shall have been elected and 
qualified.

               b. If at the time of filling any vacancy or any newly created 
directorship, the directors then in office shall constitute less than a 
majority of the whole board


<PAGE>

(as constituted immediately prior to any such increase), the Delaware Court 
of Chancery may, upon application of any stockholder or stockholders holding 
at least ten percent (10%) of the total number of the shares at the time 
outstanding having the right to vote for such directors, summarily order an 
election to be held to fill any such vacancies or newly created 
directorships, or to replace the directors chosen by the directors then in 
offices as aforesaid, which election shall be governed by Section 211 of the 
DGCL.

               c. At any time or times that the corporation is subject to 
Section 2115(b) of the CGCL, if, after the filling of any vacancy by the 
directors then in office who have been elected by stockholders shall 
constitute less than a majority of the directors then in office, then

                    (i) Any holder or holders of an aggregate of five percent 
(5%) or more of the total number of shares at the time outstanding having the 
right to vote for those directors may call a special meeting of stockholders; 
or

                    (ii) The Superior Court of the proper county shall, upon 
application of such stockholder or stockholders, summarily order a special 
meeting of stockholders, to be held to elect the entire board, all in 
accordance with Section 305(c) of the CGCL. The term of office of any 
director shall terminate upon that election of a successor.

     B.

         1. Subject to paragraph (h) of Section 43 of the Bylaws, the Bylaws 
may be altered or amended or new Bylaws adopted by the affirmative vote of at 
least sixty-six and two-thirds percent (66-2/3%) of the voting power of all 
of the then-outstanding shares of the voting stock of the corporation 
entitled to vote. The Board of Directors shall also have the power to adopt, 
amend, or repeal Bylaws.

         2. The directors of the corporation need not be elected by written 
ballot unless the Bylaws so provide.

         3. No action shall be taken by the stockholders of the corporation 
except at an annual or special meeting of stockholders called in accordance 
with the Bylaws.

         4. Advance notice of stockholder nominations for the election of 
directors and of business to be brought by stockholders before any meeting of 
the stockholders of the corporation shall be given in the manner provided in 
the Bylaws of the corporation.


<PAGE>

                                      VI.

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

     B. This corporation is authorized to provide indemnification of agents 
(as defined in Section 317 of the CGCL) for breach of duty to the corporation 
and its shareholders through bylaw provisions or through agreements with the 
agents, or through shareholder resolutions, or otherwise, in excess of the 
indemnification otherwise permitted by Section 317 of the CGCL, subject, at 
any time or times the corporation is subject to Section 2115(b) to the limits 
on such excess indemnification set forth in Section 204 of the CGCL.

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

                                      VII.

     A. The corporation reserves the right to amend, alter, change or repeal 
any provision contained in this Certificate of Incorporation, in the manner 
now or hereafter prescribed by statute, except as provided in paragraph B. of 
this Article VII, and all rights conferred upon the stockholders herein are 
granted subject to this reservation.

     B. Notwithstanding any other provisions of this Certificate of 
Incorporation or any provision of law which might otherwise permit a lesser 
vote or no vote, but in addition to any affirmative vote of the holders of 
any particular class or series of the Voting Stock required by law, this 
Certificate of Incorporation or any Preferred Stock Designation, the 
affirmative vote of the holders of at least sixty-six and two-thirds percent 
(66-2/3%) of the voting power of all of the then-outstanding shares of the 
voting stock, voting together as a single class, shall be required to alter, 
amend or repeal Articles V, VI, and VII.




<PAGE>


                                                           EXHIBIT 3.5

                                     BYLAWS

                                       OF

                           OMNICELL TECHNOLOGIES, INC.


                                    ARTICLE 1

                                CORPORATE OFFICES


         SECTION 1.1 PRINCIPAL OFFICE The board of directors shall fix the 
location of the principal executive office of the corporation at any place 
within or outside the State of California. If the principal executive office 
is located outside such state and the corporation has one or more business 
offices in such state, then the board of directors shall fix and designate a 
principal business office in the State of California.

         SECTION 1.2 OTHER OFFICES. The board of directors may at any time 
establish branch or subordinate offices at any place or places where the 
corporation is qualified to do business.

                                    ARTICLE 2

                            MEETINGS OF SHAREHOLDERS


         SECTION 2.1 PLACE OF MEETINGS. Meetings of shareholders shall be 
held at any place within or outside the State of California designated by the 
board of directors. In the absence of any such designation, shareholders' 
meetings shall be held at the principal executive office of the corporation.

         SECTION 2.2 ANNUAL MEETING. The annual meeting of shareholders shall 
be held each year on a date and at a time designated by the board of 
directors. In the absence of such designation, the annual meeting
 of 
shareholders shall be held on the second Tuesday of May in each year at 10:00 
a.m. However, if such day falls on a legal holiday, then the meeting shall be 
held at the same time and place on the next succeeding full business day. At 
the meeting, directors shall be elected, and any other proper business may be 
transacted.

         SECTION 2.3 SPECIAL MEETING. A special meeting of the shareholders 
may be called at any time by the board of directors, or by the chairman of 
the board, or by the 

                                       1.


<PAGE>

president, or by one or more shareholders holding shares in the aggregate 
entitled to cast not less than ten percent (10%) of the votes at that meeting.

         If a special meeting is called by any person or persons other than 
the board of directors or the president or the chairman of the board, then 
the request shall be in writing, specifying the time of such meeting and the 
general nature of the business proposed to be transacted, and shall be 
delivered personally or sent by registered mail or by telegraphic or other 
facsimile transmission to the chairman of the board, the president, any vice 
president or the secretary of the corporation. The officer receiving the 
request shall cause notice to be promptly given to the shareholders entitled 
to vote, in accordance with the provisions of Sections 2.4 and 2.5 of these 
bylaws, that a meeting will be held at the time requested by the person or 
persons calling the meeting, so long as that time is not less than 
thirty-five (35) nor more than sixty (60) days after the receipt of the 
request. If the notice is not given within twenty (20) days after receipt of 
the request, then the person or persons requesting the meeting may give the 
notice. Nothing contained in this paragraph of this Section 2.3 shall be 
construed as limiting, fixing or affecting the time when a meeting of 
shareholders called by action of the board of directors may be held.

         SECTION 2.4 NOTICE OF SHAREHOLDERS' MEETINGS. All notices of 
meetings of shareholders shall be sent or otherwise given in accordance with 
Section 2.5 of these bylaws not less than ten (10) (or, if sent by 
third-class mail pursuant to Section 2.5 of these bylaws, thirty (30)) nor 
more than sixty (60) days before the date of the meeting. The notice shall 
specify the place, date, and hour of the meeting and (i) in the case of a 
special meeting, the general nature of the business to be transacted (no 
business other than that specified in the notice may be transacted) or (ii) 
in the case of the annual meeting, those matters which the board of 
directors, at the time of giving the notice, intends to present for action by 
the shareholders (but subject to the provisions of the next paragraph of this 
Section 2.4 , any proper matter may be presented at the meeting for such 
action). The notice of any meeting at which directors are to be elected shall 
include the name of any nominee or nominees who, at the time of the notice, 
the board intends to present for election.

         If action is proposed to be taken at any meeting for approval of (i) 
a contract or transaction in which a director has a direct or indirect 
financial interest, pursuant to Section 310 of the Corporations Code of 
California (the "Code"), (ii) an amendment of the articles of incorporation, 
pursuant to Section 902 of the Code, (iii) a reorganization of the 
corporation, pursuant to Section 1201 of the Code, (iv) a voluntary 
dissolution of the corporation, pursuant to Section 1900 of the Code, or (v) 
a distribution in dissolution other than in accordance with the rights of 
outstanding preferred shares, pursuant to Section 2007 of the Code, then the 
notice shall also state the general nature of that proposal.

         SECTION 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Written
notice of any meeting of shareholders shall be given either (i) personally or
(ii) by first-class mail or 

                                       2.


<PAGE>

(iii) by third-class mail but only if the corporation has outstanding shares 
held of record by five hundred (500) or more persons (determined as provided 
in Section 605 of the Code) on the record date for the shareholders' meeting, 
or (iv) by telegraphic or other written communication. Notices not personally 
delivered shall be sent charges prepaid and shall be addressed to the 
shareholder at the address of that shareholder appearing on the books of the 
corporation or given by the shareholder to the corporation for the purpose of 
notice. If no such address appears on the corporation's books or is given, 
notice shall be deemed to have been given if sent to that shareholder by mail 
or telegraphic or other written communication to the corporation's principal 
executive office, or if published at least once in a newspaper of general 
circulation in the county where that office is located. Notice shall be 
deemed to have been given at the time when delivered personally or deposited 
in the mail or sent by telegram or other means of written communication.

         If any notice addressed to a shareholder at the address of that 
shareholder appearing on the books of the corporation is returned to the 
corporation by the United States Postal Service marked to indicate that the 
United States Postal Service is unable to deliver the notice to the 
shareholder at that address, then all future notices or reports shall be 
deemed to have been duly given without further mailing if the same shall be 
available to the shareholder on written demand of the shareholder at the 
principal executive office of the corporation for a period of one (1) year 
from the date of the giving of the notice.

         An affidavit of the mailing or other means of giving any notice of 
any shareholders' meeting, executed by the secretary, assistant secretary or 
any transfer agent of the corporation giving the notice, shall be prima facie 
evidence of the giving of such notice.

         SECTION 2.6 QUORUM. The presence in person or by proxy of the 
holders of a majority of the shares entitled to vote thereat constitutes a 
quorum for the transaction of business at all meetings of shareholders. The 
shareholders present at a duly called or held meeting at which a quorum is 
present may continue to do business until adjournment, notwithstanding the 
withdrawal of enough shareholders to leave less than a quorum, if any action 
taken (other than adjournment) is approved by at least a majority of the 
shares required to constitute a quorum.

         SECTION 2.7 ADJOURNED MEETING; NOTICE. Any shareholders' meeting, 
annual or special, whether or not a quorum is present, may be adjourned from 
time to time by the vote of the majority of the shares represented at that 
meeting, either in person or by proxy. In the absence of a quorum, no other 
business may be transacted at that meeting except as provided in Section 2.6 
of these bylaws.

         When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at the meeting at which the
adjournment is taken. However, if a new record date 

                                       3.


<PAGE>

for the adjourned meeting is fixed or if the adjournment is for more than 
forty-five (45) days from the date set for the original meeting, then notice 
of the adjourned meeting shall be given. Notice of any such adjourned meeting 
shall be given to each shareholder of record entitled to vote at the 
adjourned meeting in accordance with the provisions of Sections 2.4 and 2.5 
and of these bylaws. At any adjourned meeting the corporation may transact 
any business which might have been transacted at the original meeting.

         SECTION 2.8 VOTING. The shareholders entitled to vote at any meeting 
of shareholders shall be determined in accordance with the provisions of 
Section 2.11 of these bylaws, subject to the provisions of Sections 702 
through 704 of the Code (relating to voting shares held by a fiduciary, in 
the name of a corporation or in joint ownership).

         The shareholders' vote may be by voice vote or by ballot; provided, 
however, that any election for directors must be by ballot if demanded by any 
shareholder at the meeting and before the voting has begun.

         Except as provided in the last paragraph of this Section 2.8, or as 
may be otherwise provided in the articles of incorporation, each outstanding 
share, regardless of class, shall be entitled to one vote on each matter 
submitted to a vote of the shareholders. Any shareholder entitled to vote on 
any matter may vote part of the shares in favor of the proposal and refrain 
from voting the remaining shares or, except when the matter is the election 
of directors, may vote them against the proposal; but, if the shareholder 
fails to specify the number of shares which the shareholder is voting 
affirmatively, it will be conclusively presumed that the shareholder's 
approving vote is with respect to all shares which the shareholder is 
entitled to vote.

         If a quorum is present, the affirmative vote of the majority of the 
shares represented and voting at a duly held meeting (which shares voting 
affirmatively also constitute at least a majority of the required quorum) 
shall be the act of the shareholders, unless the vote of a greater number or 
a vote by classes is required by the Code or by the articles of incorporation.

         At a shareholders' meeting at which directors are to be elected, a 
shareholder shall be entitled to cumulate votes (i.e., cast for any candidate 
a number of votes greater than the number of votes which such shareholder 
normally is entitled to cast) if the candidates' names have been placed in 
nomination prior to commencement of the voting and the shareholder has given 
notice prior to commencement of the voting of the shareholder's intention to 
cumulate votes. If any shareholder has given such a notice, then every 
shareholder entitled to vote may cumulate votes for candidates in nomination 
either (i) by giving one candidate a number of votes equal to the number of 
directors to be elected multiplied by the number of votes to which that 
shareholder's shares are normally entitled or (ii) by distributing the 
shareholder's votes on the same principle among any or all of the 

                                       4.


<PAGE>

candidates, as the shareholder thinks fit. The candidates receiving the 
highest number of affirmative votes, up to the number of directors to be 
elected, shall be elected; votes against any candidate and votes withheld 
shall have no legal effect.

         SECTION 2.9 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT

            The transactions of any meeting of shareholders, either annual or 
special, however called and noticed, and wherever held, shall be as valid as 
though they had been taken at a meeting duly held after regular call and 
notice, if a quorum be present either in person or by proxy, and if, either 
before or after the meeting, each person entitled to vote, who was not 
present in person or by proxy, signs a written waiver of notice or a consent 
to the holding of the meeting or an approval of the minutes thereof. The 
waiver of notice or consent or approval need not specify either the business 
to be transacted or the purpose of any annual or special meeting of 
shareholders, except that if action is taken or proposed to be taken for 
approval of any of those matters specified in the second paragraph of Section 
2.4 of these bylaws, the waiver of notice or consent or approval shall state 
the general nature of the proposal. All such waivers, consents, and approvals 
shall be filed with the corporate records or made a part of the minutes of 
the meeting.

         Attendance by a person at a meeting shall also constitute a waiver 
of notice of and presence at that meeting, except when the person objects at 
the beginning of the meeting to the transaction of any business because the 
meeting is not lawfully called or convened. Attendance at a meeting is not a 
waiver of any right to object to the consideration of matters required by the 
Code to be included in the notice of the meeting but not so included, if that 
objection is expressly made at the meeting.

         SECTION 2.10 SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A 
MEETING. Any action which may be taken at any annual or special meeting of 
shareholders may be taken without a meeting and without prior notice, if a 
consent in writing, setting forth the action so taken, is signed by the 
holders of outstanding shares having not less than the minimum number of 
votes that would be necessary to authorize or take that action at a meeting 
at which all shares entitled to vote on that action were present and voted.

         In the case of election of directors, such a consent shall be 
effective only if signed by the holders of all outstanding shares entitled to 
vote for the election of directors. However, a director may be elected at any 
time to fill any vacancy on the board of directors, provided that it was not 
created by removal of a director and that it has not been filled by the 
directors, by the written consent of the holders of a majority of the 
outstanding shares entitled to vote for the election of directors.

         All such consents shall be maintained in the corporate records. Any 
shareholder giving a written consent, or the shareholder's proxy holders, or 
a transferee of the shares, or 

                                       5.


<PAGE>

a personal representative of the shareholder, or their respective proxy 
holders, may revoke the consent by a writing received by the secretary of the 
corporation before written consents of the number of shares required to 
authorize the proposed action have been filed with the secretary.

         If the consents of all shareholders entitled to vote have not been 
solicited in writing and if the unanimous written consent of all such 
shareholders has not been received, then the secretary shall give prompt 
notice of the corporate action approved by the shareholders without a 
meeting. Such notice shall be given to those shareholders entitled to vote 
who have not consented in writing and shall be given in the manner specified 
in Section of these bylaws. In the case of approval of (i) a contract or 
transaction in which a director has a direct or indirect financial interest, 
pursuant to Section 310 of the Code, (ii) indemnification of a corporate 
"agent," pursuant to Section 317 of the Code, (iii) a reorganization of the 
corporation, pursuant to Section 1201 of the Code, and (iv) a distribution in 
dissolution other than in accordance with the rights of outstanding preferred 
shares, pursuant to Section 2007 of the Code, the notice shall be given at 
least ten (10) days before the consummation of any action authorized by that 
approval.

         SECTION 2.11 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING 
CONSENTS. For purposes of determining the shareholders entitled to notice of 
any meeting or to vote thereat or entitled to give consent to corporate 
action without a meeting, the board of directors may fix, in advance, a 
record date, which shall not be more than sixty (60) days nor less than ten 
(10) days before the date of any such meeting nor more than sixty (60) days 
before any such action without a meeting, and in such event only shareholders 
of record on the date so fixed are entitled to notice and to vote or to give 
consents, as the case may be, notwithstanding any transfer of any shares on 
the books of the corporation after the record date, except as otherwise 
provided in the Code.

         If the board of directors does not so fix a record date:

                  (a) the record date for determining shareholders entitled 
to notice of or to vote at a meeting of shareholders shall be at the close of 
business on the business day next preceding the day on which notice is given 
or, if notice is waived, at the close of business on the business day next 
preceding the day on which the meeting is held; and

                  (b) the record date for determining shareholders entitled 
to give consent to corporate action in writing without a meeting, (i) when no 
prior action by the board has been taken, shall be the day on which the first 
written consent is given, or (ii) when prior action by the board has been 
taken, shall be at the close of business on the day on which the board adopts 
the resolution relating to that action, or the sixtieth (60th) day before the 
date of such other action, whichever is later.

                                       6.


<PAGE>

         The record date for any other purpose shall be as provided in 
Article 8 of these bylaws.

         SECTION 2.12 PROXIES. Every person entitled to vote for directors, 
or on any other matter, shall have the right to do so either in person or by 
one or more agents authorized by a written proxy signed by the person and 
filed with the secretary of the corporation. A proxy shall be deemed signed 
if the shareholder's name is placed on the proxy whether by manual signature, 
typewriting, telegraphic transmission or otherwise) by the shareholder or the 
shareholder's attorney-in-fact. A validly executed proxy which does not state 
that it is irrevocable shall continue in full force and effect unless (i) the 
person who executed the proxy revokes it prior to the time of voting by 
delivering a writing to the corporation stating that the proxy is revoked or 
by executing a subsequent proxy and presenting it to the meeting or by voting 
in person at the meeting, or (ii) written notice of the death or incapacity 
of the maker of that proxy is received by the corporation before the vote 
pursuant to that proxy is counted; provided, however, that no proxy shall be 
valid after the expiration of eleven (11) months from the date of the proxy, 
unless otherwise provided in the proxy. The dates contained on the forms of 
proxy presumptively determine the order of execution, regardless of the 
postmark dates on the envelopes in which they are mailed. The revocability of 
a proxy that states on its face that it is irrevocable shall be governed by 
the provisions of Sections 705(e) and 705(f) of the Code.

         SECTION 2.13 INSPECTORS OF ELECTION. Before any meeting of 
shareholders, the board of directors may appoint an inspector or inspectors 
of election to act at the meeting or its adjournment. If no inspector of 
election is so appointed, then the chairman of the meeting may, and on the 
request of any shareholder or a shareholder's proxy shall, appoint an 
inspector or inspectors of election to act at the meeting. The number of 
inspectors shall be either one (1) or three (3). If inspectors are appointed 
at a meeting pursuant to the request of one (1) or more shareholders or 
proxies, then the holders of a majority of shares or their proxies present at 
the meeting shall determine whether one (1) or three (3) inspectors are to be 
appointed. If any person appointed as inspector fails to appear or fails or 
refuses to act, then the chairman of the meeting may, and upon the request of 
any shareholder or a shareholder's proxy shall, appoint a person to fill that 
vacancy.

         Such inspectors shall:

                  (a) determine the number of shares outstanding and the 
voting power of each, the number of shares represented at the meeting, the 
existence of a quorum, and the authenticity, validity, and effect of proxies;

                  (b) receive votes, ballots or consents;

                                       7.


<PAGE>

                  (c) hear and determine all challenges and questions in any 
way arising in connection with the right to vote;

                  (d) count and tabulate all votes or consents;

                  (e) determine when the polls shall close;

                  (f) determine the result; and

                  (g) do any other acts that may be proper to conduct the 
election or vote with fairness to all shareholders.

                                    ARTICLE 3

                                    DIRECTORS

         SECTION 3.1 POWERS. Subject to the provisions of the Code and any 
limitations in the articles of incorporation and these bylaws relating to 
action required to be approved by the shareholders or by the outstanding 
shares, the business and affairs of the corporation shall be managed and all 
corporate powers shall be exercised by or under the direction of the board of 
directors.

         SECTION 3.2 NUMBER OF DIRECTORS. The number of directors of the 
corporation shall be not less than five (5) nor more than nine (9). The exact 
number of directors shall be eight (8) until changed, within the limits 
specified above, by a resolution amending this Section 3.2, duly adopted by 
the board of directors or by the shareholders. The indefinite number of 
directors may be changed, or a definite number may be fixed without provision 
for an indefinite number, by a duly adopted amendment to the articles of 
incorporation or by an amendment to this bylaw duly adopted by the vote or 
written consent of holders of a majority of the outstanding shares entitled 
to vote; provided, however, that an amendment reducing the fixed number or 
the minimum number of directors to a number less than five (5) cannot be 
adopted if the votes cast against its adoption at a meeting, or the shares 
not consenting in the case of an action by written consent, are equal to more 
than sixteen and two-thirds percent (16-2/3%) of the outstanding shares 
entitled to vote thereon. No amendment may change the stated maximum number 
of authorized directors to a number greater than two (2) times the stated 
minimum number of directors minus one (1).

         No reduction of the authorized number of directors shall have the 
effect of removing any director before that director's term of office expires.

         SECTION 3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors 
shall be elected at each annual meeting of shareholders to hold office until 
the next annual meeting. Each director, including a director elected to fill 
a vacancy, shall hold office until the 

                                       8.


<PAGE>

expiration of the term for which elected and until a successor has been 
elected and qualified.

         SECTION 3.4 RESIGNATION AND VACANCIES. Any director may resign 
effective on giving written notice to the chairman of the board, the 
president, the secretary or the board of directors, unless the notice 
specifies a later time for that resignation to become effective. If the 
resignation of a director is effective at a future time, the board of 
directors may elect a successor to take office when the resignation becomes 
effective.

         Vacancies in the board of directors may be filled by a majority of 
the remaining directors, even if less than a quorum, or by a sole remaining 
director; however, a vacancy created by the removal of a director by the vote 
or written consent of the shareholders or by court order may be filled only 
by the affirmative vote of a majority of the shares represented and voting at 
a duly held meeting at which a quorum is present (which shares voting 
affirmatively also constitute a majority of the required quorum), or by the 
unanimous written consent of all shares entitled to vote thereon. Each 
director so elected shall hold office until the next annual meeting of the 
shareholders and until a successor has been elected and qualified.

         A vacancy or vacancies in the board of directors shall be deemed to 
exist (i) in the event of the death, resignation or removal of any director, 
(ii) if the board of directors by resolution declares vacant the office of a 
director who has been declared of unsound mind by an order of court or 
convicted of a felony, (iii) if the authorized number of directors is 
increased, or (iv) if the shareholders fail, at any meeting of shareholders 
at which any director or directors are elected, to elect the number of 
directors to be elected at that meeting.

         The shareholders may elect a director or directors at any time to 
fill any vacancy or vacancies not filled by the directors, but any such 
election other than to fill a vacancy created by removal, if by written 
consent, shall require the consent of the holders of a majority of the 
outstanding shares entitled to vote thereon.

         SECTION 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE. Regular 
meetings of the board of directors may be held at any place within or outside 
the State of California that has been designated from time to time by 
resolution of the board. In the absence of such a designation, regular 
meetings shall be held at the principal executive office of the corporation. 
Special meetings of the board may be held at any place within or outside the 
State of California that has been designated in the notice of the meeting or, 
if not stated in the notice or if there is no notice, at the principal 
executive office of the corporation.

                                       9.


<PAGE>

         Any meeting, regular or special, may be held by conference telephone 
or similar communication equipment, so long as all directors participating in 
the meeting can hear one another; and all such directors shall be deemed to 
be present in person at the meeting.

         SECTION 3.6 REGULAR MEETINGS. Regular meetings of the board of 
directors may be held without notice if the times of such meetings are fixed 
by the board of directors.

         SECTION 3.7 SPECIAL MEETINGS; NOTICE. Special meetings of the board 
of directors for any purpose or purposes may be called at any time by the 
chairman of the board, the president, any vice president, the secretary or 
any two directors.

         Notice of the time and place of special meetings shall be delivered 
personally or by telephone to each director or sent by first-class mail or 
telegram, charges prepaid, addressed to each director at that director's 
address as it is shown on the records of the corporation. If the notice is 
mailed, it shall be deposited in the United States mail at least four (4) 
days before the time of the holding of the meeting. If the notice is 
delivered personally or by telephone or telegram, it shall be delivered 
personally or by telephone or to the telegraph company at least forty-eight 
(48) hours before the time of the holding of the meeting. Any oral notice 
given personally or by telephone may be communicated either to the director 
or to a person at the office of the director who the person giving the notice 
has reason to believe will promptly communicate it to the director. The 
notice need not specify the purpose or the place of the meeting, if the 
meeting is to be held at the principal executive office of the corporation.

         SECTION 3.8 QUORUM. A majority of the authorized number of directors 
shall constitute a quorum for the transaction of business, except to adjourn 
as provided in Section 3.10 of these bylaws. Every act or decision done or 
made by a majority of the directors present at a duly held meeting at which a 
quorum is present shall be regarded as the act of the board of directors, 
subject to the provisions of Section 310 of the Code (as to approval of 
contracts or transactions in which a director has a direct or indirect 
material financial interest), Section 311 of the Code (as to appointment of 
committees), Section 317(e) of the Code (as to indemnification of directors), 
the articles of incorporation, and other applicable law.

         A meeting at which a quorum is initially present may continue to 
transact business notwithstanding the withdrawal of directors, if any action 
taken is approved by at least a majority of the required quorum for that 
meeting.

         SECTION 3.9 WAIVER OF NOTICE. Notice of a meeting need not be given to
any director (i) who signs a waiver of notice or a consent to holding the
meeting or an approval of the minutes thereof, whether before or after the
meeting, or (ii) who attends the meeting without protesting, prior thereto or at
its commencement, the lack of notice to such 

                                       10.


<PAGE>

directors. All such waivers, consents, and approvals shall be filed with the 
corporate records or made part of the minutes of the meeting. A waiver of 
notice need not specify the purpose of any regular or special meeting of the 
board of directors.

         SECTION 3.10 ADJOURNMENT. A majority of the directors present, 
whether or not constituting a quorum, may adjourn any meeting to another time 
and place.

         SECTION 3.11 NOTICE OF ADJOURNMENT. Notice of the time and place of 
holding an adjourned meeting need not be given unless the meeting is 
adjourned for more than twenty-four (24) hours. If the meeting is adjourned 
for more than twenty-four (24) hours, then notice of the time and place of 
the adjourned meeting shall be given before the adjourned meeting takes 
place, in the manner specified in Section 3.7 of these bylaws, to the 
directors who were not present at the time of the adjournment.

         SECTION 3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any 
action required or permitted to be taken by the board of directors may be 
taken without a meeting, provided that all members of the board individually 
or collectively consent in writing to that action. Such action by written 
consent shall have the same force and effect as a unanimous vote of the board 
of directors. Such written consent and any counterparts thereof shall be 
filed with the minutes of the proceedings of the board.

         SECTION 3.13 FEES AND COMPENSATION OF DIRECTORS. Directors and 
members of committees may receive such compensation, if any, for their 
services and such reimbursement of expenses as may be fixed or determined by 
resolution of the board of directors. This Section 3.13 shall not be 
construed to preclude any director from serving the corporation in any other 
capacity as an officer, agent, employee or otherwise and receiving 
compensation for those services.

         SECTION 3.14 APPROVAL OF LOANS TO OFFICERS.** The corporation may, 
upon the approval of the board of directors alone, make loans of money or 
property to, or guarantee the obligations of, any officer of the corporation 
or its parent or subsidiary, whether or not a director, or adopt an employee 
benefit plan or plans authorizing such loans or guaranties provided that (i) 
the board of directors determines that such a loan or guaranty or plan may 
reasonably be expected to benefit the corporation, (ii) the corporation has 
outstanding shares held of record by 100 or more persons (determined as 
provided in Section 605 of the Code) on the date of approval by the board of 
directors, and (iii) the approval of the board of directors is by a vote 
sufficient without counting the vote of any interested director or directors.

                                       11.


<PAGE>

------------------
** This section is effective only if it has been approved by the shareholders 
in accordance with Sections 315(b) and 152 of the Code.

                                    ARTICLE 4

                                   COMMITTEES

         SECTION 4.1 COMMITTEES OF DIRECTORS. The board of directors may, by 
resolution adopted by a majority of the authorized number of directors, 
designate one (1) or more committees, each consisting of two or more 
directors, to serve at the pleasure of the board. The board may designate one 
(1) or more directors as alternate members of any committee, who may replace 
any absent member at any meeting of the committee. The appointment of members 
or alternate members of a committee requires the vote of a majority of the 
authorized number of directors. Any committee, to the extent provided in the 
resolution of the board, shall have all the authority of the board, except 
with respect to:

                  (a) the approval of any action which, under the Code, also 
requires shareholders' approval or approval of the outstanding shares;

                  (b) the filling of vacancies on the board of directors or 
in any committee;

                  (c) the fixing of compensation of the directors for serving 
on the board or any committee;

                  (d) the amendment or repeal of these bylaws or the adoption 
of new bylaws;

                  (e) the amendment or repeal of any resolution of the board 
of directors which by its express terms is not so amendable or repealable;

                  (f) a distribution to the shareholders of the corporation, 
except at a rate or in a periodic amount or within a price range determined 
by the board of directors; or

                  (g) the appointment of any other committees of the board of 
directors or the members of such committees.

                                       12.


<PAGE>

         SECTION 4.2 MEETINGS AND ACTION OF COMMITTEES. Meetings and actions 
of committees shall be governed by, and held and taken in accordance with, 
the provisions of Article 3 of these bylaws, Section 3.5 (place of meetings), 
Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), 
Section 3.8 (quorum), Section 3.9 (waiver of notice), Section 3.10 
(adjournment), Section 3.11 (notice of adjournment), and Section 3.12 (action 
without meeting), with such changes in the context of those bylaws as are 
necessary to substitute the committee and its members for the board of 
directors and its members; provided, however, that the time of regular 
meetings of committees may be determined either by resolution of the board of 
directors or by resolution of the committee, that special meetings of 
committees may also be called by resolution of the board of directors, and 
that notice of special meetings of committees shall also be given to all 
alternate members, who shall have the right to attend all meetings of the 
committee. The board of directors may adopt rules for the government of any 
committee not inconsistent with the provisions of these bylaws.

                                    ARTICLE 5

                                    OFFICERS

         SECTION 5.1 OFFICERS. The officers of the corporation shall be a 
president, a secretary, and a chief financial officer. The corporation may 
also have, at the discretion of the board of directors, a chairman of the 
board, one or more vice presidents, one or more assistant secretaries, one or 
more assistant treasurers, and such other officers as may be appointed in 
accordance with the provisions of Section of these bylaws. Any number of 
offices may be held by the same person.

         SECTION 5.2 ELECTION OF OFFICERS. The officers of the corporation, 
except such officers as may be appointed in accordance with the provisions of 
Section 5.3 or Section 5.5 of these bylaws, shall be chosen by the board, 
subject to the rights, if any, of an officer under any contract of employment.

         SECTION 5.3 SUBORDINATE OFFICERS. The board of directors may 
appoint, or may empower the president to appoint, such other officers as the 
business of the corporation may require, each of whom shall hold office for 
such period, have such authority, and perform such duties as are provided in 
these bylaws or as the board of directors may from time to time determine.

         SECTION 5.4 REMOVAL AND RESIGNATION OF OFFICERS. Subject to the 
rights, if any, of an officer under any contract of employment, any officer 
may be removed, either with or without cause, by the board of directors at 
any regular or special meeting of the board or, except in case of an officer 
chosen by the board of directors, by any officer upon whom such power of 
removal may be conferred by the board of directors.

                                       13.


<PAGE>

         Any officer may resign at any time by giving written notice to the 
corporation. Any resignation shall take effect at the date of the receipt of 
that notice or at any later time specified in that notice; and, unless 
otherwise specified in that notice, the acceptance of the resignation shall 
not be necessary too make it effective. Any resignation is without prejudice 
to the rights, if any, of the corporation under any contract to which the 
officer is a party.

         SECTION 5.5 VACANCIES IN OFFICES. A vacancy in any office because of 
death, resignation, removal, disqualification or any other cause shall be 
filled in the manner prescribed in these bylaws for regular appointments to 
that office.

         SECTION 5.6 CHAIRMAN OF THE BOARD. The chairman of the board, if 
such an officer be elected, shall, if present, preside at meetings of the 
board of directors and exercise and perform such other powers and duties as 
may from time to time be assigned to him by the board of directors or as may 
be prescribed by these bylaws. If there is no president, then the chairman of 
the board shall also be the chief executive officer of the corporation and 
shall have the powers and duties prescribed in Section 5.7 of these bylaws.

         SECTION 5.7 PRESIDENT. Subject to such supervisory powers, if any, 
as may be given by the board of directors to the chairman of the board, if 
there be such an officer, the president shall be the chief executive officer 
of the corporation and shall, subject to the control of the board of 
directors, have general supervision, direction, and control of the business 
and the officers of the corporation. He shall preside at all meetings of the 
shareholders and, in the absence or nonexistence of a chairman of the board, 
at all meetings of the board of directors. He shall have the general powers 
and duties of management usually vested in the office of president of a 
corporation ration, and shall have such other powers and duties as may be 
prescribed by the board of directors or these bylaws.

         SECTION 5.8 VICE PRESIDENTS. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as fixed by the
board of directors or, if not ranked, a vice president designated by the board
of directors, shall perform all the duties of the president and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
board of directors, these bylaws, the president or the chairman of the board.

         SECTION 5.9 SECRETARY. The secretary shall keep or cause to be kept, 
at the principal executive office of the corporation or such other place as 
the board of directors may direct, a book of minutes of all meetings and 
actions of directors, committees of directors and shareholders. The minutes 
shall show the time and place of each meeting, whether regular or special 
(and, if special, how authorized and the notice given), the names 

                                       14.


<PAGE>

of those present at directors' meetings or committee meetings, the number of 
shares present or represented at shareholders' meetings, and the proceedings 
thereof.

         The secretary shall keep, or cause to be kept, at the principal 
executive office of the corporation or at the office of the corporation's 
transfer agent or registrar, as determined by resolution of the board of 
directors, a share register, or a duplicate share register, showing the names 
of all shareholders and their addresses, the number and classes of shares 
held by each, the number and date of certificates evidencing such shares, and 
the number and date of cancellation of every certificate surrendered for 
cancellation.

         The secretary shall give, or cause to be given, notice of all 
meetings of the shareholders and of the board of directors required to be 
given by law or by these bylaws. He shall keep the seal of the corporation, 
if one be adopted, in safe custody and shall have such other powers and 
perform such other duties as may be prescribed by the board of directors or 
by these bylaws.

         SECTION 5.10 CHIEF FINANCIAL OFFICER. The chief financial officer 
shall keep and maintain, or cause to be kept and maintained, adequate and 
correct books and records of accounts of the properties and business 
transactions of the corporation, including accounts of its assets, 
liabilities, receipts, disbursements, gains, losses, capital, retained 
earnings, and shares. The books of account shall at all reasonable times be 
open to inspection by any director.

         The chief financial officer shall deposit all money and other 
valuables in the name and to the credit of the corporation with such 
depositaries as may be designated by the board of directors. He shall 
disburse the funds of the corporation as may be ordered by the board of 
directors, shall render to the president and directors, whenever they request 
it, an account of all of his transactions as chief financial officer and of 
the financial condition of the corporation, and shall have such other powers 
and perform such other duties as may be prescribed by the board of directors 
or these bylaws.

                                    ARTICLE 6

       INDEMNIFICATION OF DIRECTORS. OFFICERS. EMPLOYEES, AND OTHER AGENTS

         SECTION 6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The 
corporation shall, to the maximum extent and in the manner permitted by the 
Code, indemnify each of its directors and officers against expenses (as 
defined in Section 317(a) of the Code), judgments, fines, settlements, and 
other amounts actually and reasonably incurred in connection with any 
proceeding (as defined in Section 317(a) of the Code), arising by reason of 
the fact that such person is or was an agent of the corporation. For purposes 
of 

                                       15.


<PAGE>

this Article 6, a "director" or "officer" of the corporation includes any 
person (i) who is or was a director or officer of the corporation, (ii) who 
is or was serving at the request of the corporation as a director or officer 
of another corporation, partnership, joint venture, trust or other 
enterprise, or (iii) who was a director or officer of a corporation which was 
a predecessor corporation of the corporation or of another enterprise at the 
request of such predecessor corporation.

         SECTION 6.2 INDEMNIFICATION OF OTHERS. The corporation shall have 
the power, to the extent and in the manner permitted by the Code, to 
indemnify each of its employees and agents (other than directors and 
officers) against expenses (as defined in Section 317(a) of the Code), 
judgments, fines, settlements, and other amounts actually and reasonably 
incurred in connection with any proceeding (as defined in Section 317(a) of 
the Code), arising by reason of the fact that such person is or was an agent 
of the corporation. For purposes of this Article 6, an "employee" or "agent" 
of the corporation (other than a director or officer) includes any person (i) 
who is or was an employee or agent of the corporation, (ii) who is or was 
serving at the request of the corporation as an employee or agent of another 
corporation, partnership, joint venture, trust or other enterprise, or (iii) 
who was an employee or agent of a corporation which was a predecessor 
corporation of the corporation or of another enterprise at the request of 
such predecessor corporation.

         SECTION 6.3 PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred in 
defending any civil or criminal action or proceeding for which 
indemnification is required pursuant to Section 6.1 or for which 
indemnification is permitted pursuant to Section 6.2 following authorization 
thereof by the Board of Directors shall be paid by the corporation in advance 
of the final disposition of such action or proceeding upon receipt of an 
undertaking by or on behalf of the indemnified party to repay such amount if 
it shall ultimately be determined that the indemnified party is not entitled 
to be indemnified as authorized in this Article 6.

         SECTION 6.4 INDEMNITY NOT EXCLUSIVE. The indemnification provided by 
this Article 6 shall not be deemed exclusive of any other rights to which 
those seeking indemnification may be entitled under any bylaw, agreement, 
vote of shareholders or disinterested directors or otherwise, both as to 
action in an official capacity and as to action in another capacity while 
holding such office, to the extent that such additional rights to 
indemnification are authorized in the Articles of Incorporation.

         SECTION 6.5 INSURANCE INDEMNIFICATION. The corporation shall have 
the power to purchase and maintain insurance on behalf of any person who is 
or was a director, officer, employee or agent of the corporation against any 
liability asserted against or incurred by such person in such capacity or 
arising out of such person's status as such, whether or not the corporation 
would have the power to indemnify him against such liability under the 
provisions of this Article 6.

                                       16.


<PAGE>

         SECTION 6.6 CONFLICTS. No indemnification or advance shall be made 
under this Article 6, except where such indemnification or advance is 
mandated by law or the order, judgment or decree of any court of competent 
jurisdiction, in any circumstance where it appears:

                     (a) That it would be inconsistent with a provision of 
the Articles of Incorporation, these bylaws, a resolution of the shareholders 
or an agreement in effect at the time of the accrual of the alleged cause of 
the action asserted in the proceeding in which the expenses were incurred or 
other amounts were paid, which prohibits or otherwise limits indemnification; 
or

                     (b) That it would be inconsistent with any condition 
expressly imposed by a court in approving a settlement.

                                    ARTICLE 7

                               RECORDS AND REPORTS

         SECTION 7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER. The 
corporation shall keep either at its principal executive office or at the 
office of its transfer agent or registrar (if either be appointed), as 
determined by resolution of the board of directors, a record of its 
shareholders listing the names and addresses of all shareholders and the 
number and class of shares held by each shareholder.

         A shareholder or shareholders of the corporation who holds at least 
five percent (5%) in the aggregate of the outstanding voting shares of the 
corporation or who holds at least one percent (1%) of such voting shares and 
has filed a Schedule 14B with the Securities and Exchange Commission relating 
to the election of directors, may (i) inspect and copy the records of 
shareholders' names, addresses, and shareholdings during usual business hours 
on five (5) days' prior written demand on the corporation, (ii) obtain from 
the transfer agent of the corporation, on written demand and on the tender of 
such transfer agent's usual charges for such list, a list of the names and 
addresses of the shareholders who are entitled to vote for the election of 
directors, and their shareholdings, as of the most recent record date for 
which that list has been compiled or as of a date specified by the 
shareholder after the date of demand. Such list shall be made available to 
any such shareholder by the transfer agent on or before the later of five (5) 
days after the demand is received or five (5) days after the date specified 
in the demand as the date as of which the list is to be compiled.

                                       17.


<PAGE>

         The record of shareholders shall also be open to inspection on the 
written demand of any shareholder or holder of a voting trust certificate, at 
any time during usual business hours, for a purpose reasonably related to the 
holder's interests as a shareholder or as the holder of a voting trust 
certificate.

         Any inspection and copying under this Section 7.1 may be made in 
person or by an agent or attorney of the shareholder or holder of a voting 
trust certificate making the demand.

         SECTION 7.2 MAINTENANCE AND INSPECTION OF BYLAWS. The corporation 
shall keep at its principal executive office or, if its principal executive 
office is not in the State of California, at its principal business office in 
California the original or a copy of these bylaws as amended to date, which 
bylaws shall be open to inspection by the shareholders at all reasonable 
times during office hours. If the principal executive office of the 
corporation is outside the State of California and the corporation has no 
principal business office in such state, then the secretary shall, upon the 
written request of any shareholder, furnish to that shareholder a copy of 
these bylaws as amended to date.

         SECTION 7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. 
The accounting books and records and the minutes of proceedings of the 
shareholders, of the board of directors, and of any committee or committees 
of the board of directors shall be kept at such place or places as are 
designated by the board of directors or, in absence of such designation, at 
the principal executive office of the corporation. The minutes shall be kept 
in written form, and the accounting books and records shall be kept either in 
written form or in any other form capable of being converted into written 
form.

         The minutes and accounting books and records shall be open to 
inspection upon the written demand of any shareholder or holder of a voting 
trust certificate, at any reasonable time during usual business hours, for a 
purpose reasonably related to the holder's interests as a shareholder or as 
the holder of a voting trust certificate. The inspection may be made in 
person or by an agent or attorney and shall include the right to copy and 
make extracts. Such rights of inspection shall extend to the records of each 
subsidiary corporation of the corporation.

         SECTION 7.4 INSPECTION BY DIRECTORS. Every director shall have the 
absolute right at any reasonable time to inspect all books, records, and 
documents of every kind as well as the physical properties of the corporation 
and each of its subsidiary corporations. Such inspection by a director may be 
made in person or by an agent or attorney. The right of inspection includes 
the right to copy and make extracts of documents.

         SECTION 7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER. The board of 
directors shall cause an annual report to be sent to the shareholders not 
later than one hundred twenty 

                                       18.


<PAGE>

(120) days after the close of the fiscal year adopted by the corporation. 
Such report shall be sent at least fifteen (15) days (or, if sent by 
third-class mail, thirty-five (35) days) before the annual meeting of 
shareholders to be held during the next fiscal year and in the manner 
specified in Section of these bylaws for giving notice to shareholders of the 
corporation.

         The annual report shall contain (i) a balance sheet as of the end of 
the fiscal year, (ii) an income statement, (iii) a statement of changes in 
financial position for the fiscal year, and (iv) any report of independent 
accountants or, if there is no such report, the certificate of an authorized 
officer of the corporation that the statements were prepared without audit 
from the books and records of the corporation.

         The foregoing requirement of an annual report shall be waived so 
long as the shares of the corporation are held by fewer than one hundred 
(100) holders of record.

         SECTION 7.6 FINANCIAL STATEMENTS. If no annual report for the fiscal 
year has been sent to shareholders, then the corporation shall, upon the 
written request of any shareholder made more than one hundred twenty (120) 
days after the close of such fiscal year, deliver or mail to the person 
making the request, within thirty (30) days thereafter, a copy of a balance 
sheet as of the end of such fiscal year and an income statement and statement 
of changes in financial position for such fiscal year.

         If a shareholder or shareholders holding at least five percent (5%) 
of the outstanding shares of any class of stock of the corporation makes a 
written request to the corporation for an income statement of the corporation 
for the three-month, six-month or nine-month period of the then current 
fiscal year ended more than thirty (30) days before the date of the request, 
and for a balance sheet of the corporation as of the end of that period, then 
the chief financial officer shall cause that statement to be prepared, if not 
already prepared, and shall deliver personally or mail that statement or 
statements to the person making the request within thirty (30) days after the 
receipt of the request. If the corporation has not sent to the shareholders 
its annual report for the last fiscal year, the statements referred to in the 
first paragraph of this Section 7.6 shall likewise be delivered or mailed to 
the shareholder or shareholders within thirty (30) days after the request.

         The quarterly income statements and balance sheets referred to in 
this section shall be accompanied by the report, if any, of any independent 
accountants engaged by the corporation or by the certificate of an authorized 
officer of the corporation that the financial statements were prepared 
without audit from the books and records of the corporation.

         SECTION 7.7 REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The 
chairman of the board, the president, any vice president, the chief financial 
officer, the secretary or assistant secretary of this corporation, or any 
other person authorized by the board of directors or the president or a vice 
president, is authorized to vote, represent, and exercise 

                                       19.


<PAGE>

on behalf of this corporation all rights incident to any and all shares of 
any other corporation or corporations standing in the name of this 
corporation. The authority herein granted may be exercised either by such 
person directly or by any other person authorized to do so by proxy or power 
of attorney duly executed by such person having the authority.

                                    ARTICLE 8

                                 GENERAL MATTERS

         SECTION 8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. 
For purposes of determining the shareholders entitled to receive payment of 
any dividend or other distribution or allotment of any rights or the 
shareholders entitled to exercise any rights in respect of any other lawful 
action (other than action by shareholders by written consent without a 
meeting), the board of directors may fix, in advance, a record date, which 
shall not be more than sixty (60) days before any such action. In that case, 
only shareholders of record at the close of business on the date so fixed are 
entitled to receive the dividend, distribution or allotment of rights, or to 
exercise such rights, as the case may be, notwithstanding any transfer of any 
shares on the books of the corporation after the record date so fixed, except 
as otherwise provided in the Code.

         If the board of directors does not so fix a record date, then the 
record date for determining shareholders for any such purpose shall be at the 
close of business on the day on which the board adopts the applicable 
resolution or the sixtieth (60th) day before the date of that action, 
whichever is later.

         SECTION 8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS. From time to 
time, the board of directors shall determine by resolution which person or 
persons may sign or endorse all checks, drafts, other orders for payment of 
money, notes or other evidences of indebtedness that are issued in the name 
of or payable to the corporation, and only the persons so authorized shall 
sign or endorse those instruments.

         SECTION 8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED. The 
board of directors, except as otherwise provided in these bylaws, may 
authorize any officer or officers, or agent or agents, to enter into any 
contract or execute any instrument in the name of and on behalf of the 
corporation; such authority may be general or confined to specific instances. 
Unless so authorized or ratified by the board of directors or within the 
agency power of an officer, no officer, agent or employee shall have any 
power or authority to bind the corporation by any contract or engagement or 
to pledge its credit or to render it liable for any purpose or for any amount.

         SECTION 8.4 CERTIFICATES FOR SHARES. A certificate or certificates 
for shares of the corporation shall be issued to each shareholder when any of 
such shares are fully paid. The 

                                       20.


<PAGE>

board of directors may authorize the issuance of certificates for shares 
partly paid provided that these certificates shall state the total amount of 
the consideration to be paid for them and the amount actually paid. All 
certificates shall be signed in the name of the corporation by the chairman 
of the board or the vice chairman of the board or the president or a vice 
president and by the chief financial officer or an assistant treasurer or the 
secretary or an assistant secretary, certifying the number of shares and the 
class or series of shares owned by the shareholder. Any or all of the 
signatures on the certificate may be facsimile.

         In case any officer, transfer agent or registrar who has signed or 
whose facsimile signature has been placed on a certificate ceases to be that 
officer, transfer agent or registrar before that certificate is issued, it 
may be issued by the corporation with the same effect as if that person were 
an officer, transfer agent or registrar at the date of issue.

         SECTION 8.5 LOST CERTIFICATES. Except as provided in this Section 
8.5, no new certificates for shares shall be issued to replace a previously 
issued certificate unless the latter is surrendered to the corporation and 
canceled at the same time. The board of directors may, in case any share 
certificate or certificate for any other security is lost, stolen or 
destroyed, authorize the issuance of replacement certificates on such terms 
and conditions as the board may require; the board may require 
indemnification of the corporation secured by a bond or other adequate 
security sufficient to protect the corporation against any claim that may be 
made against it, including any expense or liability, on account of the 
alleged loss, theft or destruction of the certificate or the issuance of the 
replacement certificate.

         SECTION 8.6 CONSTRUCTION; DEFINITIONS. Unless the context requires 
otherwise, the general provisions, rules of construction, and definitions in 
the Code shall govern the construction of these bylaws. Without limiting the 
generality of this provision, the singular number includes the plural, the 
plural number includes the singular, and the term "person" includes both a 
corporation and a natural person.

                                       21.


<PAGE>

                                    ARTICLE 9

                                   AMENDMENTS

         SECTION 9.1 AMENDMENT BY SHAREHOLDERS. New bylaws may be adopted or 
these bylaws may be amended or repealed by the vote or written consent of 
holders of a majority of the outstanding shares entitled to vote; provided, 
however, that if the articles of incorporation of the corporation set forth 
the number of authorized directors of the corporation, then the authorized 
number of directors may be changed only by an amendment of the articles of 
incorporation.

         SECTION 9.2 AMENDMENT BY DIRECTORS. Subject to the rights of the 
shareholders as provided in Section 9.1 of these bylaws, bylaws, other than a 
bylaw or an amendment of a bylaw changing the authorized number of directors 
(except to fix the authorized number of directors pursuant to a bylaw 
providing for a variable number of directors), may be adopted, amended or 
repealed by the board of directors.

                                       22.


<PAGE>


                        CERTIFICATE OF ADOPTION OF BYLAWS

                                       OF

                           OMNICELL TECHNOLOGIES, INC.

           CERTIFICATE BY SECRETARY OF ADOPTION BY SHAREHOLDERS' VOTE

         The undersigned hereby certifies that he is the duly elected, 
qualified, and acting Secretary of Omnicell Technologies, Inc. and that the 
foregoing Bylaws, comprising twenty-five (25) pages, were submitted to the 
shareholders by written consent dated May 10, 1993, and recorded in the 
minutes thereof and were ratified by the vote of shareholders entitled to 
exercise the majority of the voting power of the corporation.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand and 
affixed the corporate seal this _____ day of _________________1993.



                              ------------------------------------------------
                              Michael J. O'Donnell, Secretary



<PAGE>










                                     BYLAWS

                                       OF

                           OMNICELL TECHNOLOGIES, INC.








<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                              PAGE 
<S>                <C>                                                                                        <C>
ARTICLE 1.            CORPORATE OFFICES..........................................................................1

         Section 1.1       Principal Office......................................................................1
         Section 1.2       Other Offices.........................................................................1

ARTICLE 2.            MEETINGS OF SHAREHOLDERS...................................................................1

         Section 2.1       Place of Meetings.....................................................................1
         Section 2.2       Annual Meeting........................................................................1
         Section 2.3       Special Meeting.......................................................................1
         Section 2.4       Notice of Shareholders' Meetings......................................................2
         Section 2.5       Manner of Giving Notice; Affidavit of Notice..........................................2
         Section 2.6       Quorum................................................................................3
         Section 2.7       Adjourned Meeting; Notice.............................................................3
         Section 2.8       Voting................................................................................4
         Section 2.9       Validation of Meetings; Waiver of Notice; Consent.....................................5
         Section 2.10      Shareholder Action by Written Consent without a Meeting...............................5
         Section 2.11      Record Date for Shareholder Notice; Voting; Giving Consents...........................6
         Section 2.12      Proxies...............................................................................6
         Section 2.13      Inspectors of Election................................................................7

ARTICLE 3.            DIRECTORS..................................................................................8

         Section 3.1       Powers................................................................................8
         Section 3.2       Number of Directors...................................................................8
         Section 3.3       Election and Term of Office of Directors..............................................8
         Section 3.4       Resignation and Vacancies.............................................................8
         Section 3.5       Place of Meetings; Meetings by Telephone..............................................9
         Section 3.6       Regular Meetings......................................................................9
         Section 3.7       Special Meetings; Notice.............................................................10
         Section 3.8       Quorum...............................................................................10
         Section 3.9       Waiver of Notice.....................................................................10
         Section 3.10      Adjournment..........................................................................10
         Section 3.11      Notice of Adjournment................................................................11
         Section 3.12      Board Action by Written Consent without a Meeting....................................11
         Section 3.13      Fees and Compensation of Directors...................................................11
         Section 3.14      Approval of Loans to Officers.**.....................................................11

ARTICLE 4.            COMMITTEES................................................................................12

                                       i.


<PAGE>

                                TABLE OF CONTENTS
                                  (CONTINUED)

         Section 4.1       Committees of Directors..............................................................12
         Section 4.2       Meetings And Action Of Committees....................................................12

ARTICLE 5.            OFFICERS..................................................................................13

         Section 5.1       Officers.............................................................................13
         Section 5.2       Election of Officers.................................................................13
         Section 5.3       Subordinate Officers.................................................................13
         Section 5.4       Removal and Resignation of Officers..................................................13
         Section 5.5       Vacancies in Offices.................................................................14
         Section 5.6       Chairman of the Board................................................................14
         Section 5.7       President............................................................................14
         Section 5.8       Vice Presidents......................................................................14
         Section 5.9       Secretary............................................................................14
         Section 5.10      Chief Financial Officer..............................................................15

ARTICLE 6.            INDEMNIFICATION OF DIRECTORS.  OFFICERS.  EMPLOYEES, AND OTHER AGENTS.....................15

         Section 6.1       Indemnification of Directors and Officers............................................15
         Section 6.2       Indemnification of Others............................................................16
         Section 6.3       Payment of Expenses in Advance.......................................................16
         Section 6.4       Indemnity Not Exclusive..............................................................16
         Section 6.5       Insurance Indemnification............................................................16
         Section 6.6       Conflicts............................................................................16

ARTICLE 7.            RECORDS AND REPORTS.......................................................................17

         Section 7.1       Maintenance and Inspection of Share Register.........................................17
         Section 7.2       Maintenance and Inspection of Bylaws.................................................18
         Section 7.3       Maintenance and Inspection of Other Corporate Records................................18
         Section 7.4       Inspection by Directors..............................................................18
         Section 7.5       Annual Report to Shareholders; Waiver................................................18
         Section 7.6       Financial Statements.................................................................19
         Section 7.7       Representation of Shares of Other Corporations.......................................19

ARTICLE 8.            GENERAL MATTERS...........................................................................20

         Section 8.1       Record Date for Purposes Other Than Notice and Voting................................20
         Section 8.2       Checks; Drafts; Evidences of Indebtedness............................................20
         Section 8.3       Corporate Contracts and Instruments: How Executed....................................20

                                       ii.


<PAGE>

                                TABLE OF CONTENTS
                                  (CONTINUED)

         Section 8.4       Certificates for Shares..............................................................20
         Section 8.5       Lost Certificates....................................................................21
         Section 8.6       Construction; Definitions............................................................21

ARTICLE 9.            AMENDMENTS................................................................................21

         Section 9.1       Amendment by Shareholders............................................................21
         Section 9.2       Amendment by Directors...............................................................21
</TABLE>

                                       iii.



<PAGE>


                                                                    EXHIBIT 3.6

                                     BYLAWS

                                       OF

                           OMNICELL MERGER CORPORATION


                            (A DELAWARE CORPORATION)

<PAGE>


<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                              <C>
ARTICLE I             OFFICES.....................................................................................1

         Section 1.        Registered Office......................................................................1

         Section 2.        Other Offices..........................................................................1

ARTICLE II            CORPORATE SEAL..............................................................................1

         Section 3.        Corporate Seal.........................................................................1

ARTICLE III           STOCKHOLDERS' MEETINGS......................................................................1

         Section 4.        Place of Meetings......................................................................1

         Section 5.        Annual Meetings........................................................................1

         Section 6.        Special Meetings.......................................................................3

         Section 7.        Notice of Meetings.....................................................................4

         Section 8.        Quorum.................................................................................5

         Section 9.        Adjournment and Notice of Adjourned Meetings...........................................5

         Section 10.       Voting Rights..........................................................................5

         Section 11.       Joint Owners of Stock..................................................................6

         Section 12.       List of Stockholders...................................................................6

         Section 13.       Action without Meeting.................................................................6

         Section 14.       Organization...........................................................................7

ARTICLE IV            DIRECTORS...................................................................................8

         Section 15.       Number and Term of Office..............................................................8

         Section 16.       Powers.................................................................................8

         Section 17.       Classes of Directors...................................................................8

         Section 18.       Vacancies..............................................................................9

         Section 19.       Resignation...........................................................................10

         Section 20.       Removal...............................................................................10

         Section 21.       Meetings..............................................................................10

         Section 22.       Quorum and Voting.....................................................................11

         Section 23.       Action without Meeting................................................................12

         Section 24.       Fees and Compensation.................................................................12

         Section 25.       Committees............................................................................12

         Section 26.       Organization..........................................................................13


                                       i.

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                                                               PAGE

ARTICLE V             OFFICERS...................................................................................13

         Section 27.       Officers Designated...................................................................13

         Section 28.       Tenure and Duties of Officers.........................................................14

         Section 29.       Delegation of Authority...............................................................15

         Section 30.       Resignations..........................................................................15

         Section 31.       Removal...............................................................................15


ARTICLE VI            EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE
                      CORPORATION................................................................................15

         Section 32.       Execution of Corporate Instruments....................................................15

         Section 33.       Voting of Securities Owned by the  Corporation........................................16

ARTICLE VII           SHARES OF STOCK............................................................................16

         Section 34.       Form and Execution of Certificates....................................................16

         Section 35.       Lost Certificates.....................................................................17

         Section 36.       Transfers.............................................................................17

         Section 37.       Fixing Record Dates...................................................................17

         Section 38.       Registered Stockholders...............................................................18

ARTICLE VIII          OTHER SECURITIES OF THE CORPORATION........................................................18

         Section 39.       Execution of Other Securities.........................................................18

ARTICLE IX            DIVIDENDS..................................................................................19

         Section 40.       Declaration of Dividends..............................................................19

         Section 41.       Dividend Reserve......................................................................19

ARTICLE X             FISCAL YEAR................................................................................19

         Section 42.       Fiscal Year...........................................................................19

ARTICLE XI            INDEMNIFICATION............................................................................19

         Section 43.       Indemnification of Directors, Executive Officers, Other Officers, Employees
                           and Other Agents......................................................................19

ARTICLE XII           NOTICES....................................................................................23

         Section 44.       Notices...............................................................................23

ARTICLE XIII          AMENDMENTS.................................................................................24

         Section 45.       Amendments............................................................................24


                                       ii.

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                                                               PAGE

ARTICLE XIV           LOANS TO OFFICERS..........................................................................24

         Section 46.       Loans to Officers.....................................................................24
</TABLE>


                                      iii.

<PAGE>

                                     BYLAWS

                                       OF

                           OMNICELL MERGER CORPORATION


                            (A DELAWARE CORPORATION)


                                    ARTICLE I

                                     OFFICES

         SECTION 1.  REGISTERED OFFICE. The registered office of the 
corporation in the State of Delaware shall be in the City of Wilmington, 
County of New Castle.

         SECTION 2.  OTHER OFFICES. The corporation shall also have and 
maintain an office or principal place of business at such place as may be 
fixed by the Board of Directors, and may also have offices at such other 
places, both within and without the State of Delaware as the Board of 
Directors may from time to time determine or the business of the corporation 
may require.

                                   ARTICLE II

                                 CORPORATE SEAL

         SECTION 3.  CORPORATE SEAL. The corporate seal shall consist of a 
die bearing the name of the corporation and the inscription, "Corporate 
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to 
be impressed or affixed or reproduced or otherwise.

                                   ARTICLE III

                             STOCKHOLDERS' MEETINGS

         SECTION 4.  PLACE OF MEETINGS. Meetings of the stockholders of the 
corporation shall be held at such place, either within or without the State 
of Delaware, as may be designated from time to time by the Board of 
Directors, or, if not so designated, then at the office of the corporation 
required to be maintained pursuant to Section 2 hereof.

         SECTION 5.  ANNUAL MEETINGS.

                  (a) The annual meeting of the stockholders of the 
corporation, for the purpose of election of directors and for such other 
business as may lawfully come before it, shall be held on such date and at 
such time as may be designated from time to time by the Board of Directors. 
Nominations of persons for election to the Board of Directors of the 
corporation and the proposal of business to be considered by the stockholders 
may be made at an annual meeting of stockholders: (i) pursuant to the 
corporation's notice of meeting of stockholders; (ii) by or at the 

                                       1.

<PAGE>

direction of the Board of Directors; or (iii) by any stockholder of the 
corporation who was a stockholder of record at the time of giving of notice 
provided for in the following paragraph, who is entitled to vote at the 
meeting and who complied with the notice procedures set forth in Section 5.

                  (b) At an annual meeting of the stockholders, only such 
business shall be conducted as shall have been properly brought before the 
meeting. For nominations or other business to be properly brought before an 
annual meeting by a stockholder pursuant to clause (c) of Section 5(a) of 
these Bylaws, (i) the stockholder must have given timely notice thereof in 
writing to the Secretary of the corporation, (ii) such other business must be 
a proper matter for stockholder action under the Delaware General Corporation 
Law ("DGCL"), (iii) if the stockholder, or the beneficial owner on whose 
behalf any such proposal or nomination is made, has provided the corporation 
with a Solicitation Notice (as defined in this Section 5(b)), such 
stockholder or beneficial owner must, in the case of a proposal, have 
delivered a proxy statement and form of proxy to holders of at least the 
percentage of the corporation's voting shares required under applicable law 
to carry any such proposal, or, in the case of a nomination or nominations, 
have delivered a proxy statement and form of proxy to holders of a percentage 
of the corporation's voting shares reasonably believed by such stockholder or 
beneficial owner to be sufficient to elect the nominee or nominees proposed 
to be nominated by such stockholder, and must, in either case, have included 
in such materials the Solicitation Notice, and (iv) if no Solicitation Notice 
relating thereto has been timely provided pursuant to this section, the 
stockholder or beneficial owner proposing such business or nomination must 
not have solicited a number of proxies sufficient to have required the 
delivery of such a Solicitation Notice under this Section 5. To be timely, a 
stockholder's notice shall be delivered to the Secretary at the principal 
executive offices of the Corporation not later than the close of business on 
the ninetieth (90th) day nor earlier than the close of business on the one 
hundred twentieth (120th) day prior to the first anniversary of the preceding 
year's annual meeting; provided, however, that in the event that the date of 
the annual meeting is advanced more than thirty (30) days prior to or delayed 
by more than thirty (30) days after the anniversary of the preceding year's 
annual meeting, notice by the stockholder to be timely must be so delivered 
not earlier than the close of business on the one hundred twentieth (120th) 
day prior to such annual meeting and not later than the close of business on 
the later of the ninetieth (90th) day prior to such annual meeting or the 
tenth (10th) day following the day on which public announcement of the date 
of such meeting is first made. In no event shall the public announcement of 
an adjournment of an annual meeting commence a new time period for the giving 
of a stockholder's notice as described above. Such stockholder's notice shall 
set forth: (A) as to each person whom the stockholder proposed to nominate 
for election or reelection as a director all information relating to such 
person that is required to be disclosed in solicitations of proxies for 
election of directors in an election contest, or is otherwise required, in 
each case pursuant to Regulation 14A under the Securities Exchange Act of 
1934, as amended (the "1934 Act") and Rule 14a-11 thereunder (including such 
person's written consent to being named in the proxy statement as a nominee 
and to serving as a director if elected); (B) as to any other business that 
the stockholder proposes to bring before the meeting, a brief description of 
the business desired to be brought before the meeting, the reasons for 
conducting such business at the meeting and any material interest in such 
business of such stockholder and the beneficial owner, if any, on whose 
behalf the proposal is made; and (C) as to the stockholder giving the notice 
and the beneficial owner, if any, on whose behalf the nomination or proposal 
is made (i) the name and address of such stockholder, as they appear on the 
corporation's books, 

                                       2.

<PAGE>

and of such beneficial owner, (ii) the class and number of shares of the 
corporation which are owned beneficially and of record by such stockholder 
and such beneficial owner, and (iii) whether either such stockholder or 
beneficial owner intends to deliver a proxy statement and form of proxy to 
holders of, in the case of the proposal, at least the percentage of the 
corporation's voting shares required under applicable law to carry the 
proposal or, in the case of a nomination or nominations, a sufficient number 
of holders of the corporation's voting shares to elect such nominee or 
nominees (an affirmative statement of such intent, a "Solicitation Notice").

                  (c) Notwithstanding anything in the second sentence of 
Section 5(b) of these Bylaws to the contrary, in the event that the number of 
directors to be elected to the Board of Directors of the Corporation is 
increased and there is no public announcement naming all of the nominees for 
director or specifying the size of the increased Board of Directors made by 
the corporation at least one hundred (100) days prior to the first 
anniversary of the preceding year's annual meeting, a stockholder's notice 
required by this Section 5 shall also be considered timely, but only with 
respect to nominees for any new positions created by such increase, if it 
shall be delivered to the Secretary at the principal executive offices of the 
corporation not later than the close of business on the tenth (10th) day 
following the day on which such public announcement is first made by the 
corporation.

                  (d) Only such persons who are nominated in accordance with 
the procedures set forth in this Section 5 shall be eligible to serve as 
directors and only such business shall be conducted at a meeting of 
stockholders as shall have been brought before the meeting in accordance with 
the procedures set forth in this Section 5. Except as otherwise provided by 
law, the Chairman of the meeting shall have the power and duty to determine 
whether a nomination or any business proposed to be brought before the 
meeting was made, or proposed, as the case may be, in accordance with the 
procedures set forth in these Bylaws and, if any proposed nomination or 
business is not in compliance with these Bylaws, to declare that such 
defective proposal or nomination shall not be presented for stockholder 
action at the meeting and shall be disregarded.

                  (e) Notwithstanding the foregoing provisions of this 
Section 5, in order to include information with respect to a stockholder 
proposal in the proxy statement and form of proxy for a stockholders' 
meeting, stockholders must provide notice as required by the regulations 
promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to 
affect any rights of stockholders to request inclusion of proposals in the 
corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.

                  (f) For purposes of this Section 5, "public announcement" 
shall mean disclosure in a press release reported by the Dow Jones News 
Service, Associated Press or comparable national news service or in a 
document publicly filed by the corporation with the Securities and Exchange 
Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.

         SECTION 6.  SPECIAL MEETINGS.

                  (a) Special meetings of the stockholders of the corporation 
may be called, for any purpose or purposes, by (i) the Chairman of the Board 
of Directors, (ii) the Chief Executive Officer, or (iii) the Board of 
Directors pursuant to a resolution adopted by a majority of the total 

                                       3.


<PAGE>

number of authorized directors (whether or not there exist any vacancies in 
previously authorized directorships at the time any such resolution is 
presented to the Board of Directors for adoption).

At any time or times that the corporation is subject to Section 2115(b) of 
the California General Corporation Law ("CGCL"), stockholders holding five 
percent (5%) or more of the outstanding shares shall have the right to call a 
special meeting of stockholders only as set forth in Section 18(c) herein.

                  (b) If a special meeting is properly called by any person 
or persons other than the Board of Directors, the request shall be in 
writing, specifying the general nature of the business proposed to be 
transacted, and shall be delivered personally or sent by registered mail or 
by telegraphic or other facsimile transmission to the Chairman of the Board 
of Directors, the Chief Executive Officer, or the Secretary of the 
corporation. No business may be transacted at such special meeting otherwise 
than specified in such notice. The Board of Directors shall determine the 
time and place of such special meeting, which shall be held not less than 
thirty-five (35) nor more than one hundred twenty (120) days after the date 
of the receipt of the request. Upon determination of the time and place of 
the meeting, the officer receiving the request shall cause notice to be given 
to the stockholders entitled to vote, in accordance with the provisions of 
Section 7 of these Bylaws. If the notice is not given within one hundred 
(100) days after the receipt of the request, the person or persons properly 
requesting the meeting may set the time and place of the meeting and give the 
notice. Nothing contained in this paragraph (b) shall be construed as 
limiting, fixing, or affecting the time when a meeting of stockholders called 
by action of the Board of Directors may be held.

                  (c) Nominations of persons for election to the Board of 
Directors may be made at a special meeting of stockholders at which directors 
are to be elected pursuant to the corporation's notice of meeting (i) by or 
at the direction of the Board of Directors or (ii) by any stockholder of the 
corporation who is a stockholder of record at the time of giving notice 
provided for in these Bylaws who shall be entitled to vote at the meeting and 
who complies with the notice procedures set forth in this Section 6(c). In 
the event the corporation calls a special meeting of stockholders for the 
purpose of electing one or more directors to the Board of Directors, any such 
stockholder may nominate a person or persons (as the case may be), for 
election to such position(s) as specified in the corporation's notice of 
meeting, if the stockholder's notice required by Section 5(b) of these Bylaws 
shall be delivered to the Secretary at the principal executive offices of the 
corporation not earlier than the close of business on the one hundred 
twentieth (120th) day prior to such special meeting and not later than the 
close of business on the later of the ninetieth (90th) day prior to such 
meeting or the tenth (10th) day following the day on which public 
announcement is first made of the date of the special meeting and of the 
nominees proposed by the Board of Directors to be elected at such meeting. In 
no event shall the public announcement of an adjournment of a special meeting 
commence a new time period for the giving of a stockholder's notice as 
described above.

         SECTION 7.  NOTICE OF MEETINGS. Except as otherwise provided by law 
or the Certificate of Incorporation, written notice of each meeting of 
stockholders shall be given not less than ten (10) nor more than sixty (60) 
days before the date of the meeting to each stockholder entitled to vote at 
such meeting, such notice to specify the place, date and hour and purpose or 
purposes of the meeting. Notice of the time, place and purpose of any meeting 
of 

                                       4.

<PAGE>

stockholders may be waived in writing, signed by the person entitled to 
notice thereof, either before or after such meeting, and will be waived by 
any stockholder by his attendance thereat in person or by proxy, except when 
the stockholder attends a meeting for the express purpose of objecting, at 
the beginning of the meeting, to the transaction of any business because the 
meeting is not lawfully called or convened. Any stockholder so waiving notice 
of such meeting shall be bound by the proceedings of any such meeting in all 
respects as if due notice thereof had been given.

         SECTION 8.  QUORUM. At all meetings of stockholders, except where 
otherwise provided by statute or by the Certificate of Incorporation, or by 
these Bylaws, the presence, in person or by proxy duly authorized, of the 
holders of a majority of the outstanding shares of stock entitled to vote 
shall constitute a quorum for the transaction of business. In the absence of 
a quorum, any meeting of stockholders may be adjourned, from time to time, 
either by the chairman of the meeting or by vote of the holders of a majority 
of the shares represented thereat, but no other business shall be transacted 
at such meeting. The stockholders present at a duly called or convened 
meeting, at which a quorum is present, may continue to transact business 
until adjournment, notwithstanding the withdrawal of enough stockholders to 
leave less than a quorum. Except as otherwise provided by statute, the 
Certificate of Incorporation or these Bylaws, in all matters other than the 
election of directors, the affirmative vote of the majority of shares present 
in person or represented by proxy at the meeting and entitled to vote on the 
subject matter shall be the act of the stockholders. Except as otherwise 
provided by statute, the Certificate of Incorporation or these Bylaws, 
directors shall be elected by a plurality of the votes of the shares present 
in person or represented by proxy at the meeting and entitled to vote on the 
election of directors. Where a separate vote by a class or classes or series 
is required, except where otherwise provided by the statute or by the 
Certificate of Incorporation or these Bylaws, a majority of the outstanding 
shares of such class or classes or series, present in person or represented 
by proxy, shall constitute a quorum entitled to take action with respect to 
that vote on that matter and, except where otherwise provided by the statute 
or by the Certificate of Incorporation or these Bylaws, the affirmative vote 
of the majority (plurality, in the case of the election of directors) of the 
votes cast by the holders of shares of such class or classes or series shall 
be the act of such class or classes or series.

         SECTION 9.  ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any 
meeting of stockholders, whether annual or special, may be adjourned from 
time to time either by the chairman of the meeting or by the vote of a 
majority of the shares casting votes. When a meeting is adjourned to another 
time or place, notice need not be given of the adjourned meeting if the time 
and place thereof are announced at the meeting at which the adjournment is 
taken. At the adjourned meeting, the corporation may transact any business 
which might have been transacted at the original meeting. If the adjournment 
is for more than thirty (30) days or if after the adjournment a new record 
date is fixed for the adjourned meeting, a notice of the adjourned meeting 
shall be given to each stockholder of record entitled to vote at the meeting.

         SECTION 10.  VOTING RIGHTS. For the purpose of determining those 
stockholders entitled to vote at any meeting of the stockholders, except as 
otherwise provided by law, only persons in whose names shares stand on the 
stock records of the corporation on the record date, as provided in Section 
12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. 
Every person entitled to vote shall have the right to do so either in person 
or by an

                                       5.

<PAGE>

agent or agents authorized by a proxy granted in accordance with Delaware 
law. An agent so appointed need not be a stockholder. No proxy shall be voted 
after three (3) years from its date of creation unless the proxy provides for 
a longer period.

         SECTION 11.  JOINT OWNERS OF STOCK. If shares or other securities 
having voting power stand of record in the names of two (2) or more persons, 
whether fiduciaries, members of a partnership, joint tenants, tenants in 
common, tenants by the entirety, or otherwise, or if two (2) or more persons 
have the same fiduciary relationship respecting the same shares, unless the 
Secretary is given written notice to the contrary and is furnished with a 
copy of the instrument or order appointing them or creating the relationship 
wherein it is so provided, their acts with respect to voting shall have the 
following effect: (a) if only one (1) votes, his act binds all; (b) if more 
than one (1) votes, the act of the majority so voting binds all; (c) if more 
than one (1) votes, but the vote is evenly split on any particular matter, 
each faction may vote the securities in question proportionally, or may apply 
to the Delaware Court of Chancery for relief as provided in the DGCL, Section 
217(b). If the instrument filed with the Secretary shows that any such 
tenancy is held in unequal interests, a majority or even-split for the 
purpose of subsection (c) shall be a majority or even-split in interest.

         SECTION 12.  LIST OF STOCKHOLDERS. The Secretary shall prepare and 
make, at least ten (10) days before every meeting of stockholders, a complete 
list of the stockholders entitled to vote at said meeting, arranged in 
alphabetical order, showing the address of each stockholder and the number of 
shares registered in the name of each stockholder. Such list shall be open to 
the examination of any stockholder, for any purpose germane to the meeting, 
during ordinary business hours, for a period of at least ten (10) days prior 
to the meeting, either at a place within the city where the meeting is to be 
held, which place shall be specified in the notice of the meeting, or, if not 
specified, at the place where the meeting is to be held. The list shall be 
produced and kept at the time and place of meeting during the whole time 
thereof and may be inspected by any stockholder who is present.

         SECTION 13.  ACTION WITHOUT MEETING.

                  (a) Unless otherwise provided in the Certificate of 
Incorporation, any action required by statute to be taken at any annual or 
special meeting of the stockholders, or any action which may be taken at any 
annual or special meeting of the stockholders, may be taken without a 
meeting, without prior notice and without a vote, if a consent in writing, 
setting forth the action so taken, shall be signed by the holders of 
outstanding stock having not less than the minimum number of votes that would 
be necessary to authorize or take such action at a meeting at which all 
shares entitled to vote thereon were present and voted.

                  (b) Every written consent shall bear the date of signature 
of each stockholder who signs the consent, and no written consent shall be 
effective to take the corporate action referred to therein unless, within 
sixty (60) days of the earliest dated consent delivered to the corporation in 
the manner herein required, written consents signed by a sufficient number of 
stockholders to take action are delivered to the corporation by delivery to 
its registered office in the State of Delaware, its principal place of 
business or an officer or agent of the corporation having custody of the book 
in which proceedings of meetings of stockholders are recorded. 

                                       6.

<PAGE>

Delivery made to a corporation's registered office shall be by hand or by 
certified or registered mail, return receipt requested.

                  (c) Prompt notice of the taking of the corporate action 
without a meeting by less than unanimous written consent shall be given to 
those stockholders who have not consented in writing and who, if the action 
had been taken at a meeting, would have been entitled to notice of the 
meeting if the record date for such meeting had been the date that written 
consents signed by a sufficient number of stockholders to take action were 
delivered to the corporation as provided in Section 228 (c) of the DGCL. If 
the action which is consented to is such as would have required the filing of 
a certificate under any section of the DGCL if such action had been voted on 
by stockholders at a meeting thereof, then the certificate filed under such 
section shall state, in lieu of any statement required by such section 
concerning any vote of stockholders, that written consent has been given in 
accordance with Section 228 of the DGCL.

                  (d) Notwithstanding the foregoing, no such action by 
written consent may be taken following the closing of the initial public 
offering pursuant to an effective registration statement under the Securities 
Act of 1933, as amended (the "1933 Act"), covering the offer and sale of 
Common Stock of the corporation (the "Initial Public Offering").

         SECTION 14.  ORGANIZATION.

                  (a) At every meeting of stockholders, the Chairman of the 
Board of Directors, or, if a Chairman has not been appointed or is absent, 
the President, or, if the President is absent, a chairman of the meeting 
chosen by a majority in interest of the stockholders entitled to vote, 
present in person or by proxy, shall act as chairman. The Secretary, or, in 
his absence, an Assistant Secretary directed to do so by the President, shall 
act as secretary of the meeting.

                  (b) The Board of Directors of the corporation shall be 
entitled to make such rules or regulations for the conduct of meetings of 
stockholders as it shall deem necessary, appropriate or convenient. Subject 
to such rules and regulations of the Board of Directors, if any, the chairman 
of the meeting shall have the right and authority to prescribe such rules, 
regulations and procedures and to do all such acts as, in the judgment of 
such chairman, are necessary, appropriate or convenient for the proper 
conduct of the meeting, including, without limitation, establishing an agenda 
or order of business for the meeting, rules and procedures for maintaining 
order at the meeting and the safety of those present, limitations on 
participation in such meeting to stockholders of record of the corporation 
and their duly authorized and constituted proxies and such other persons as 
the chairman shall permit, restrictions on entry to the meeting after the 
time fixed for the commencement thereof, limitations on the time allotted to 
questions or comments by participants and regulation of the opening and 
closing of the polls for balloting on matters which are to be voted on by 
ballot. Unless and to the extent determined by the Board of Directors or the 
chairman of the meeting, meetings of stockholders shall not be required to be 
held in accordance with rules of parliamentary procedure.

                                       7.

<PAGE>

                                   ARTICLE IV

                                    DIRECTORS

         SECTION 15.  NUMBER AND TERM OF OFFICE. The authorized number of 
directors of the corporation shall be fixed in accordance with the 
Certificate of Incorporation. Directors need not be stockholders unless so 
required by the Certificate of Incorporation. If for any cause, the directors 
shall not have been elected at an annual meeting, they may be elected as soon 
thereafter as convenient at a special meeting of the stockholders called for 
that purpose in the manner provided in these Bylaws.

         SECTION 16.  POWERS. The powers of the corporation shall be 
exercised, its business conducted and its property controlled by the 
Board of Directors, except as may be otherwise provided by statute or by 
the Certificate of Incorporation.

         SECTION 17.  CLASSES OF DIRECTORS.

                  (a) Subject to the rights of the holders of any series of 
Preferred Stock to elect additional directors under specified circumstances, 
following the closing of the Initial Public Offering, the directors shall be 
divided into three classes designated as Class I, Class II and Class III, 
respectively. Directors shall be assigned to each class in accordance with a 
resolution or resolutions adopted by the Board of Directors. At the first 
annual meeting of stockholders following the closing of the Initial Public 
Offering, the term of office of the Class I directors shall expire and Class 
I directors shall be elected for a full term of three years. At the second 
annual meeting of stockholders following the Initial Public Offering, the 
term of office of the Class II directors shall expire and Class II directors 
shall be elected for a full term of three years. At the third annual meeting 
of stockholders following the Initial Public Offering, the term of office of 
the Class III directors shall expire and Class III directors shall be elected 
for a full term of three years. At each succeeding annual meeting of 
stockholders, directors shall be elected for a full term of three years to 
succeed the directors of the class whose terms expire at such annual meeting. 
During such time or times that the corporation is subject to Section 2115(b) 
of the CGCL, this Section 17(a) shall become effective and apply only when 
the corporation is a "listed" corporation within the meaning of Section 301.5 
of the CGCL.

                  (b) In the event that the corporation is unable to have a 
classified Board of Directors under applicable law, Section 17(a) of these 
Bylaws shall not apply and all directors shall be elected at each annual 
meeting of stockholders to hold office until the next annual meeting.

                  (c) No stockholder entitled to vote at an election for 
directors may cumulate votes to which such stockholder is entitled, unless, 
at the time of the election, the corporation (i) is subject to Section 
2115(b) of the CGCL AND (ii) is not or ceases to be a "listed" corporation 
under Section 301.5 of the CGCL. During this time, every stockholder entitled 
to vote at an election for directors may cumulate such stockholder's votes 
and give one candidate a number of votes equal to the number of directors to 
be elected multiplied by the number of votes to which such stockholder's 
shares are otherwise entitled, or distribute the stockholder's votes on the 
same principle among as many candidates as such stockholder thinks fit. No 
stockholder, however, 

                                       8.

<PAGE>

shall be entitled to so cumulate such stockholder's votes unless (i) the 
names of such candidate or candidates have been placed in nomination prior to 
the voting and (ii) the stockholder has given notice at the meeting, prior to 
the voting, of such stockholder's intention to cumulate such stockholder's 
votes. If any stockholder has given proper notice to cumulate votes, all 
stockholders may cumulate their votes for any candidates who have been 
properly placed in nomination. Under cumulative voting, the candidates 
receiving the highest number of votes, up to the number of directors to be 
elected, are elected.

         Notwithstanding the foregoing provisions of this section, each 
director shall serve until his successor is duly elected and qualified or 
until his death, resignation or removal. No decrease in the number of 
directors constituting the Board of Directors shall shorten the term of any 
incumbent director.

         SECTION 18.  VACANCIES.

                  (a) Unless otherwise provided in the Certificate of 
Incorporation, any vacancies on the Board of Directors resulting from death, 
resignation, disqualification, removal or other causes and any newly created 
directorships resulting from any increase in the number of directors shall, 
unless the Board of Directors determines by resolution that any such 
vacancies or newly created directorships shall be filled by stockholders, be 
filled only by the affirmative vote of a majority of the directors then in 
office, even though less than a quorum of the Board of Directors. Any 
director elected in accordance with the preceding sentence shall hold office 
for the remainder of the full term of the director for which the vacancy was 
created or occurred and until such director's successor shall have been 
elected and qualified. A vacancy in the Board of Directors shall be deemed to 
exist under this Section 18 in the case of the death, removal or resignation 
of any director.

                  (b) If at the time of filling any vacancy or any newly 
created directorship, the directors then in office shall constitute less than 
a majority of the whole board (as constituted immediately prior to any such 
increase), the Delaware Court of Chancery may, upon application of any 
stockholder or stockholders holding at least ten percent (10%) of the total 
number of the shares at the time outstanding having the right to vote for 
such directors, summarily order an election to be held to fill any such 
vacancies or newly created directorships, or to replace the directors chosen 
by the directors then in offices as aforesaid, which election shall be 
governed by Section 211 of the DGCL.

                  (c) At any time or times that the corporation is subject to 
Section 2115(b) of the CGCL, if, after the filling of any vacancy, the 
directors then in office who have been elected by stockholders shall 
constitute less than a majority of the directors then in office, then

                           (1) Any holder or holders of an aggregate of five 
percent (5%) or more of the total number of shares at the time outstanding 
having the right to vote for those directors may call a special meeting of 
stockholders; or

                           (2) The Superior Court of the proper county shall, 
upon application of such stockholder or stockholders, summarily order a 
special meeting of stockholders, to be held 

                                       9.

<PAGE>

to elect the entire board, all in accordance with Section 305(c) of the CGCL. 
The term of office of any director shall terminate upon that election of a 
successor.

         SECTION 19.  RESIGNATION. Any director may resign at any time by 
delivering his written resignation to the Secretary, such resignation to 
specify whether it will be effective at a particular time, upon receipt by 
the Secretary or at the pleasure of the Board of Directors. If no such 
specification is made, it shall be deemed effective at the pleasure of the 
Board of Directors. When one or more directors shall resign from the Board of 
Directors, effective at a future date, a majority of the directors then in 
office, including those who have so resigned, shall have power to fill such 
vacancy or vacancies, the vote thereon to take effect when such resignation 
or resignations shall become effective, and each Director so chosen shall 
hold office for the unexpired portion of the term of the Director whose place 
shall be vacated and until his successor shall have been duly elected and 
qualified.

         SECTION 20.  REMOVAL.

                  (a) During such time or times that the corporation is 
subject to Section 2115(b) of the CGCL, the Board of Directors or any 
individual director may be removed from office at any time without cause by 
the affirmative vote of the holders of at least a majority of the outstanding 
shares entitled to vote on such removal; provided, however, that unless the 
entire Board is removed, no individual director may be removed when the votes 
cast against such director's removal, or not consenting in writing to such 
removal, would be sufficient to elect that director if voted cumulatively at 
an election which the same total number of votes were cast (or, if such 
action is taken by written consent, all shares entitled to vote were voted) 
and the entire number of directors authorized at the time of such director's 
most recent election were then being elected.

                  (b) Following any date on which the corporation is no 
longer subject to Section 2115(b) of the CGCL and subject to any limitations 
imposed by law, Section 20(a) above shall no longer apply and removal shall 
be as provided in Section 141(k) of the DGCL.

         SECTION 21.  MEETINGS.

                  (a) ANNUAL MEETINGS. The annual meeting of the Board of 
Directors shall be held immediately before or after the annual meeting of 
stockholders and at the place where such meeting is held. No notice of an 
annual meeting of the Board of Directors shall be necessary and such meeting 
shall be held for the purpose of electing officers and transacting such other 
business as may lawfully come before it.

                  (b) REGULAR MEETINGS. Unless otherwise restricted by the 
Certificate of Incorporation, regular meetings of the Board of Directors may 
be held at any time or date and at any place within or without the State of 
Delaware which has been designated by the Board of Directors and publicized 
among all directors. No formal notice shall be required for regular meetings 
of the Board of Directors.

                  (c) SPECIAL MEETINGS. Unless otherwise restricted by the 
Certificate of Incorporation, special meetings of the Board of Directors may 
be held at any time and place 

                                      10.

<PAGE>

within or without the State of Delaware whenever called by the Chairman of 
the Board, the President or any two of the directors

                  (d) TELEPHONE MEETINGS. Any member of the Board of 
Directors, or of any committee thereof, may participate in a meeting by means 
of conference telephone or similar communications equipment by means of which 
all persons participating in the meeting can hear each other, and 
participation in a meeting by such means shall constitute presence in person 
at such meeting.

                  (e) NOTICE OF MEETINGS. Notice of the time and place of all 
meetings of the Board of Directors shall be orally or in writing, by 
telephone, including a voice messaging system or other system or technology 
designed to record and communicate messages, facsimile, telegraph or telex, 
or by electronic mail or other electronic means, during normal business 
hours, at least twenty-four (24) hours before the date and time of the 
meeting, or sent in writing to each director by first class mail, charges 
prepaid, at least three (3) days before the date of the meeting. Notice of 
any meeting may be waived in writing at any time before or after the meeting 
and will be waived by any director by attendance thereat, except when the 
director attends the meeting for the express purpose of objecting, at the 
beginning of the meeting, to the transaction of any business because the 
meeting is not lawfully called or convened.

                  (f) WAIVER OF NOTICE. The transaction of all business at 
any meeting of the Board of Directors, or any committee thereof, however 
called or noticed, or wherever held, shall be as valid as though had at a 
meeting duly held after regular call and notice, if a quorum be present and 
if, either before or after the meeting, each of the directors not present 
shall sign a written waiver of notice. All such waivers shall be filed with 
the corporate records or made a part of the minutes of the meeting.

         SECTION 22.  QUORUM AND VOTING.

                  (a) Unless the Certificate of Incorporation requires a 
greater number and except with respect to indemnification questions arising 
under Section 43 hereof, for which a quorum shall be one-third of the exact 
number of directors fixed from time to time in accordance with the 
Certificate of Incorporation, a quorum of the Board of Directors shall 
consist of a majority of the exact number of directors fixed from time to 
time by the Board of Directors in accordance with the Certificate of 
Incorporation; PROVIDED, HOWEVER, at any meeting whether a quorum be present 
or otherwise, a majority of the directors present may adjourn from time to 
time until the time fixed for the next regular meeting of the Board of 
Directors, without notice other than by announcement at the meeting.

                  (b) At each meeting of the Board of Directors at which a 
quorum is present, all questions and business shall be determined by the 
affirmative vote of a majority of the directors present, unless a different 
vote be required by law, the Certificate of Incorporation or these Bylaws.

                                      11.

<PAGE>

         SECTION 23.  ACTION WITHOUT MEETING. Unless otherwise restricted by 
the Certificate of Incorporation or these Bylaws, any action required or 
permitted to be taken at any meeting of the Board of Directors or of any 
committee thereof may be taken without a meeting, if all members of the Board 
of Directors or committee, as the case may be, consent thereto in writing, 
and such writing or writings are filed with the minutes of proceedings of the 
Board of Directors or committee.

         SECTION 24.  FEES AND COMPENSATION. Directors shall be entitled to 
such compensation for their services as may be approved by the Board of 
Directors, including, if so approved, by resolution of the Board of 
Directors, a fixed sum and expenses of attendance, if any, for attendance at 
each regular or special meeting of the Board of Directors and at any meeting 
of a committee of the Board of Directors. Nothing herein contained shall be 
construed to preclude any director from serving the corporation in any other 
capacity as an officer, agent, employee, or otherwise and receiving 
compensation therefor.

         SECTION 25.  COMMITTEES.

                  (a) EXECUTIVE COMMITTEE. The Board of Directors may appoint 
an Executive Committee to consist of one (1) or more members of the Board of 
Directors. The Executive Committee, to the extent permitted by law and 
provided in the resolution of the Board of Directors shall have and may 
exercise all the powers and authority of the Board of Directors in the 
management of the business and affairs of the corporation, and may authorize 
the seal of the corporation to be affixed to all papers which may require it; 
but no such committee shall have the power or authority in reference to (i) 
approving or adopting, or recommending to the stockholders, any action or 
matter expressly required by the DGCL to be submitted to stockholders for 
approval, or (ii) adopting, amending or repealing any bylaw of the 
corporation.

                  (b) OTHER COMMITTEES. The Board of Directors may, from time 
to time, appoint such other committees as may be permitted by law. Such other 
committees appointed by the Board of Directors shall consist of one (1) or 
more members of the Board of Directors and shall have such powers and perform 
such duties as may be prescribed by the resolution or resolutions creating 
such committees, but in no event shall any such committee have the powers 
denied to the Executive Committee in these Bylaws.

                  (c) TERM. Each member of a committee of the Board of 
Directors shall serve a term on the committee coexistent with such member's 
term on the Board of Directors. The Board of Directors, subject to any 
requirements of any outstanding series of preferred Stock and the provisions 
of subsections (a) or (b) of this Bylaw, may at any time increase or decrease 
the number of members of a committee or terminate the existence of a 
committee. The membership of a committee member shall terminate on the date 
of his death or voluntary resignation from the committee or from the Board of 
Directors. The Board of Directors may at any time for any reason remove any 
individual committee member and the Board of Directors may fill any committee 
vacancy created by death, resignation, removal or increase in the number of 
members of the committee. The Board of Directors may designate one or more 
directors as alternate members of any committee, who may replace any absent 
or disqualified member at any meeting of the committee, and, in addition, in 
the absence or disqualification of any member of a committee, the member or 
members thereof present at any meeting and not disqualified from 

                                      12.

<PAGE>

voting, whether or not he or they constitute a quorum, may unanimously 
appoint another member of the Board of Directors to act at the meeting in the 
place of any such absent or disqualified member.

                  (d) MEETINGS. Unless the Board of Directors shall otherwise 
provide, regular meetings of the Executive Committee or any other committee 
appointed pursuant to this Section 25 shall be held at such times and places 
as are determined by the Board of Directors, or by any such committee, and 
when notice thereof has been given to each member of such committee, no 
further notice of such regular meetings need be given thereafter. Special 
meetings of any such committee may be held at any place which has been 
determined from time to time by such committee, and may be called by any 
director who is a member of such committee, upon written notice to the 
members of such committee of the time and place of such special meeting given 
in the manner provided for the giving of written notice to members of the 
Board of Directors of the time and place of special meetings of the Board of 
Directors. Notice of any special meeting of any committee may be waived in 
writing at any time before or after the meeting and will be waived by any 
director by attendance thereat, except when the director attends such special 
meeting for the express purpose of objecting, at the beginning of the 
meeting, to the transaction of any business because the meeting is not 
lawfully called or convened. A majority of the authorized number of members 
of any such committee shall constitute a quorum for the transaction of 
business, and the act of a majority of those present at any meeting at which 
a quorum is present shall be the act of such committee.

         SECTION 26.  ORGANIZATION. At every meeting of the directors, the 
Chairman of the Board of Directors, or, if a Chairman has not been appointed 
or is absent, the President (if a director), or if the President is absent, 
the most senior Vice President (if a director), or, in the absence of any 
such person, a chairman of the meeting chosen by a majority of the directors 
present, shall preside over the meeting. The Secretary, or in his absence, 
any Assistant Secretary directed to do so by the President, shall act as 
secretary of the meeting.

                                    ARTICLE V

                                    OFFICERS

         SECTION 27.  OFFICERS DESIGNATED. The officers of the corporation 
shall include, if and when designated by the Board of Directors, the Chairman 
of the Board of Directors, the Chief Executive Officer, the President, one or 
more Vice Presidents, the Secretary, the Chief Financial Officer, the 
Treasurer and the Controller, all of whom shall be elected at the annual 
organizational meeting of the Board of Directors. The Board of Directors may 
also appoint one or more Assistant Secretaries, Assistant Treasurers, 
Assistant Controllers and such other officers and agents with such powers and 
duties as it shall deem necessary. The Board of Directors may assign such 
additional titles to one or more of the officers as it shall deem 
appropriate. Any one person may hold any number of offices of the corporation 
at any one time unless specifically prohibited therefrom by law. The salaries 
and other compensation of the officers of the corporation shall be fixed by 
or in the manner designated by the Board of Directors.

                                      13.

<PAGE>

         SECTION 28.  TENURE AND DUTIES OF OFFICERS.

                  (a) GENERAL. All officers shall hold office at the pleasure 
of the Board of Directors and until their successors shall have been duly 
elected and qualified, unless sooner removed. Any officer elected or 
appointed by the Board of Directors may be removed at any time by the Board 
of Directors. If the office of any officer becomes vacant for any reason, the 
vacancy may be filled by the Board of Directors.

                  (b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The 
Chairman of the Board of Directors, when present, shall preside at all 
meetings of the stockholders and the Board of Directors. The Chairman of the 
Board of Directors shall perform other duties commonly incident to his office 
and shall also perform such other duties and have such other powers, as the 
Board of Directors shall designate from time to time. If there is no 
President, then the Chairman of the Board of Directors shall also serve as 
the Chief Executive Officer of the corporation and shall have the powers and 
duties prescribed in paragraph (c) of this Section 28.

                  (c) DUTIES OF PRESIDENT. The President shall preside at all 
meetings of the stockholders and at all meetings of the Board of Directors, 
unless the Chairman of the Board of Directors has been appointed and is 
present. Unless some other officer has been elected Chief Executive Officer 
of the corporation, the President shall be the chief executive officer of the 
corporation and shall, subject to the control of the Board of Directors, have 
general supervision, direction and control of the business and officers of 
the corporation. The President shall perform other duties commonly incident 
to his office and shall also perform such other duties and have such other 
powers, as the Board of Directors shall designate from time to time.

                  (d) DUTIES OF VICE PRESIDENTS. The Vice Presidents may 
assume and perform the duties of the President in the absence or disability 
of the President or whenever the office of President is vacant. The Vice 
Presidents shall perform other duties commonly incident to their office and 
shall also perform such other duties and have such other powers as the Board 
of Directors or the President shall designate from time to time.

                  (e) DUTIES OF SECRETARY. The Secretary shall attend all 
meetings of the stockholders and of the Board of Directors and shall record 
all acts and proceedings thereof in the minute book of the corporation. The 
Secretary shall give notice in conformity with these Bylaws of all meetings 
of the stockholders and of all meetings of the Board of Directors and any 
committee thereof requiring notice. The Secretary shall perform all other 
duties given him in these Bylaws and other duties commonly incident to his 
office and shall also perform such other duties and have such other powers, 
as the Board of Directors shall designate from time to time. The President 
may direct any Assistant Secretary to assume and perform the duties of the 
Secretary in the absence or disability of the Secretary, and each Assistant 
Secretary shall perform other duties commonly incident to his office and 
shall also perform such other duties and have such other powers as the Board 
of Directors or the President shall designate from time to time.

                                      14.

<PAGE>

                  (f) DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial 
Officer shall keep or cause to be kept the books of account of the 
corporation in a thorough and proper manner and shall render statements of 
the financial affairs of the corporation in such form and as often as 
required by the Board of Directors or the President. The Chief Financial 
Officer, subject to the order of the Board of Directors, shall have the 
custody of all funds and securities of the corporation. The Chief Financial 
Officer shall perform other duties commonly incident to his office and shall 
also perform such other duties and have such other powers as the Board of 
Directors or the President shall designate from time to time. The President 
may direct the Treasurer or any Assistant Treasurer, or the Controller or any 
Assistant Controller to assume and perform the duties of the Chief Financial 
Officer in the absence or disability of the Chief Financial Officer, and each 
Treasurer and Assistant Treasurer and each Controller and Assistant 
Controller shall perform other duties commonly incident to his office and 
shall also perform such other duties and have such other powers as the Board 
of Directors or the President shall designate from time to time.

         SECTION 29.  DELEGATION OF AUTHORITY. The Board of Directors may 
from time to time delegate the powers or duties of any officer to any other 
officer or agent, notwithstanding any provision hereof.

         SECTION 30.  RESIGNATIONS. Any officer may resign at any time by 
giving written notice to the Board of Directors or to the President or to the 
Secretary. Any such resignation shall be effective when received by the 
person or persons to whom such notice is given, unless a later time is 
specified therein, in which event the resignation shall become effective at 
such later time. Unless otherwise specified in such notice, the acceptance of 
any such resignation shall not be necessary to make it effective. Any 
resignation shall be without prejudice to the rights, if any, of the 
corporation under any contract with the resigning officer.

         SECTION 31.  REMOVAL. Any officer may be removed from office at any 
time, either with or without cause, by the affirmative vote of a majority of 
the directors in office at the time, or by the unanimous written consent of 
the directors in office at the time, or by any committee or superior officers 
upon whom such power of removal may have been conferred by the Board of 
Directors.

                                   ARTICLE VI

           EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES
                            OWNED BY THE CORPORATION

         SECTION 32.  EXECUTION OF CORPORATE INSTRUMENTS. The Board of 
Directors may, in its discretion, determine the method and designate the 
signatory officer or officers, or other person or persons, to execute on 
behalf of the corporation any corporate instrument or document, or to sign on 
behalf of the corporation the corporate name without limitation, or to enter 
into contracts on behalf of the corporation, except where otherwise provided 
by law or these Bylaws, and such execution or signature shall be binding upon 
the corporation.

                                      15.

<PAGE>

         All checks and drafts drawn on banks or other depositaries on funds 
to the credit of the corporation or in special accounts of the corporation 
shall be signed by such person or persons as the Board of Directors shall 
authorize so to do.

         Unless authorized or ratified by the Board of Directors or within 
the agency power of an officer, no officer, agent or employee shall have any 
power or authority to bind the corporation by any contract or engagement or 
to pledge its credit or to render it liable for any purpose or for any amount.

         SECTION 33.  VOTING OF SECURITIES OWNED BY THE CORPORATION. All 
stock and other securities of other corporations owned or held by the 
corporation for itself, or for other parties in any capacity, shall be voted, 
and all proxies with respect thereto shall be executed, by the person 
authorized so to do by resolution of the Board of Directors, or, in the 
absence of such authorization, by the Chairman of the Board of Directors, the 
Chief Executive Officer, the President, or any Vice President.

                                   ARTICLE VII

                                 SHARES OF STOCK

         SECTION 34.  FORM AND EXECUTION OF CERTIFICATES. Certificates for 
the shares of stock of the corporation shall be in such form as is consistent 
with the Certificate of Incorporation and applicable law. Every holder of 
stock in the corporation shall be entitled to have a certificate signed by or 
in the name of the corporation by the Chairman of the Board of Directors, or 
the President or any Vice President and by the Treasurer or Assistant 
Treasurer or the Secretary or Assistant Secretary, certifying the number of 
shares owned by him in the corporation. Any or all of the signatures on the 
certificate may be facsimiles. In case any officer, transfer agent, or 
registrar who has signed or whose facsimile signature has been placed upon a 
certificate shall have ceased to be such officer, transfer agent, or 
registrar before such certificate is issued, it may be issued with the same 
effect as if he were such officer, transfer agent, or registrar at the date 
of issue. Each certificate shall state upon the face or back thereof, in full 
or in summary, all of the powers, designations, preferences, and rights, and 
the limitations or restrictions of the shares authorized to be issued or 
shall, except as otherwise required by law, set forth on the face or back a 
statement that the corporation will furnish without charge to each 
stockholder who so requests the powers, designations, preferences and 
relative, participating, optional, or other special rights of each class of 
stock or series thereof and the qualifications, limitations or restrictions 
of such preferences and/or rights. Within a reasonable time after the 
issuance or transfer of uncertificated stock, the corporation shall send to 
the registered owner thereof a written notice containing the information 
required to be set forth or stated on certificates pursuant to this section 
or otherwise required by law or with respect to this section a statement that 
the corporation will furnish without charge to each stockholder who so 
requests the powers, designations, preferences and relative participating, 
optional or other special rights of each class of stock or series thereof and 
the qualifications, limitations or restrictions of such preferences and/or 
rights. Except as otherwise expressly provided by law, the rights and 
obligations of the holders of certificates representing stock of the same 
class and series shall be identical.

                                      16.

<PAGE>

         SECTION 35.  LOST CERTIFICATES. A new certificate or certificates 
shall be issued in place of any certificate or certificates theretofore 
issued by the corporation alleged to have been lost, stolen, or destroyed, 
upon the making of an affidavit of that fact by the person claiming the 
certificate of stock to be lost, stolen, or destroyed. The corporation may 
require, as a condition precedent to the issuance of a new certificate or 
certificates, the owner of such lost, stolen, or destroyed certificate or 
certificates, or his legal representative, to agree to indemnify the 
corporation in such manner as it shall require or to give the corporation a 
surety bond in such form and amount as it may direct as indemnity against any 
claim that may be made against the corporation with respect to the 
certificate alleged to have been lost, stolen, or destroyed.

         SECTION 36.  TRANSFERS.

                  (a) Transfers of record of shares of stock of the 
corporation shall be made only upon its books by the holders thereof, in 
person or by attorney duly authorized, and upon the surrender of a properly 
endorsed certificate or certificates for a like number of shares.

                  (b) The corporation shall have power to enter into and 
perform any agreement with any number of stockholders of any one or more 
classes of stock of the corporation to restrict the transfer of shares of 
stock of the corporation of any one or more classes owned by such 
stockholders in any manner not prohibited by the DGCL.

         SECTION 37.  FIXING RECORD DATES.

                  (a) In order that the corporation may determine the 
stockholders entitled to notice of or to vote at any meeting of stockholders 
or any adjournment thereof, the Board of Directors may fix, in advance, a 
record date, which record date shall not precede the date upon which the 
resolution fixing the record date is adopted by the Board of Directors, and 
which record date shall, subject to applicable law, not be more than sixty 
(60) nor less than ten (10) days before the date of such meeting. If no 
record date is fixed by the Board of Directors, the record date for 
determining stockholders entitled to notice of or to vote at a meeting of 
stockholders shall be at the close of business on the day next preceding the 
day on which notice is given, or if notice is waived, at the close of 
business on the day next preceding the day on which the meeting is held. A 
determination of stockholders of record entitled to notice of or to vote at a 
meeting of stockholders shall apply to any adjournment of the meeting; 
PROVIDED, HOWEVER, that the Board of Directors may fix a new record date for 
the adjourned meeting.

                  (b) Prior to the Initial Public Offering, in order that the 
corporation may determine the stockholders entitled to consent to corporate 
action in writing without a meeting, the Board of Directors may fix a record 
date, which record date shall not precede the date upon which the resolution 
fixing the record date is adopted by the Board of Directors, and which date 
shall not be more than ten (10) days after the date upon which the resolution 
fixing the record date is adopted by the Board of Directors. Any stockholder 
of record seeking to have the stockholders authorize or take corporate action 
by written consent shall, by written notice to the Secretary, request the 
Board of Directors to fix a record date. The Board of Directors shall 
promptly, but in all events within ten (10) days after the date on which such 
a request is received, adopt a resolution fixing the record date. If no 
record date has been fixed by the Board of Directors within ten (10) days of 
the date on which such a request is received, the record date for 

                                      17.

<PAGE>

determining stockholders entitled to consent to corporate action in writing 
without a meeting, when no prior action by the Board of Directors is required 
by applicable law, shall be the first date on which a signed written consent 
setting forth the action taken or proposed to be taken is delivered to the 
corporation by delivery to its registered office in the State of Delaware, 
its principal place of business or an officer or agent of the corporation 
having custody of the book in which proceedings of meetings of stockholders 
are recorded. Delivery made to the corporation's registered office shall be 
by hand or by certified or registered mail, return receipt requested. If no 
record date has been fixed by the Board of Directors and prior action by the 
Board of Directors is required by law, the record date for determining 
stockholders entitled to consent to corporate action in writing without a 
meeting shall be at the close of business on the day on which the Board of 
Directors adopts the resolution taking such prior action.

                  (c) In order that the corporation may determine the 
stockholders entitled to receive payment of any dividend or other 
distribution or allotment of any rights or the stockholders entitled to 
exercise any rights in respect of any change, conversion or exchange of 
stock, or for the purpose of any other lawful action, the Board of Directors 
may fix, in advance, a record date, which record date shall not precede the 
date upon which the resolution fixing the record date is adopted, and which 
record date shall be not more than sixty (60) days prior to such action. If 
no record date is fixed, the record date for determining stockholders for any 
such purpose shall be at the close of business on the day on which the Board 
of Directors adopts the resolution relating thereto.

         SECTION 38.  REGISTERED STOCKHOLDERS. The corporation shall be 
entitled to recognize the exclusive right of a person registered on its books 
as the owner of shares to receive dividends, and to vote as such owner, and 
shall not be bound to recognize any equitable or other claim to or interest 
in such share or shares on the part of any other person whether or not it 
shall have express or other notice thereof, except as otherwise provided by 
the laws of Delaware.

                                  ARTICLE VIII

                       OTHER SECURITIES OF THE CORPORATION

         SECTION 39.  EXECUTION OF OTHER SECURITIES. All bonds, debentures 
and other corporate securities of the corporation, other than stock 
certificates (covered in Section 34), may be signed by the Chairman of the 
Board of Directors, the President or any Vice President, or such other person 
as may be authorized by the Board of Directors, and the corporate seal 
impressed thereon or a facsimile of such seal imprinted thereon and attested 
by the signature of the Secretary or an Assistant Secretary, or the Chief 
Financial Officer or Treasurer or an Assistant Treasurer; PROVIDED, HOWEVER, 
that where any such bond, debenture or other corporate security shall be 
authenticated by the manual signature, or where permissible facsimile 
signature, of a trustee under an indenture pursuant to which such bond, 
debenture or other corporate security shall be issued, the signatures of the 
persons signing and attesting the corporate seal on such bond, debenture or 
other corporate security may be the imprinted facsimile of the signatures of 
such persons. Interest coupons appertaining to any such bond, debenture or 
other corporate security, authenticated by a trustee as aforesaid, shall be 
signed by the Treasurer or an Assistant Treasurer of the corporation or such 
other person as may be authorized by the Board of Directors, or bear 
imprinted thereon the facsimile signature of such person. In case any officer 

                                      18.

<PAGE>

who shall have signed or attested any bond, debenture or other corporate 
security, or whose facsimile signature shall appear thereon or on any such 
interest coupon, shall have ceased to be such officer before the bond, 
debenture or other corporate security so signed or attested shall have been 
delivered, such bond, debenture or other corporate security nevertheless may 
be adopted by the corporation and issued and delivered as though the person 
who signed the same or whose facsimile signature shall have been used thereon 
had not ceased to be such officer of the corporation.

                                   ARTICLE IX

                                    DIVIDENDS

         SECTION 40.  DECLARATION OF DIVIDENDS. Dividends upon the capital 
stock of the corporation, subject to the provisions of the Certificate of 
Incorporation and applicable law, if any, may be declared by the Board of 
Directors pursuant to law at any regular or special meeting. Dividends may be 
paid in cash, in property, or in shares of the capital stock, subject to the 
provisions of the Certificate of Incorporation and applicable law.

         SECTION 41.  DIVIDEND RESERVE. Before payment of any dividend, there 
may be set aside out of any funds of the corporation available for dividends 
such sum or sums as the Board of Directors from time to time, in their 
absolute discretion, think proper as a reserve or reserves to meet 
contingencies, or for equalizing dividends, or for repairing or maintaining 
any property of the corporation, or for such other purpose as the Board of 
Directors shall think conducive to the interests of the corporation, and the 
Board of Directors may modify or abolish any such reserve in the manner in 
which it was created.

                                    ARTICLE X

                                   FISCAL YEAR

         SECTION 42.  FISCAL YEAR. The fiscal year of the corporation shall 
be fixed by resolution of the Board of Directors.

                                   ARTICLE XI

                                 INDEMNIFICATION

         SECTION 43.  INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER 
OFFICERS, EMPLOYEES AND OTHER AGENTS.

                  (a) DIRECTORS AND EXECUTIVE OFFICERS. The corporation shall 
indemnify its directors and executive officers (for the purposes of this 
Article XI, "executive officers" shall have the meaning defined in Rule 3b-7 
promulgated under the 1934 Act) to the fullest extent not prohibited by the 
DGCL or any other applicable law; PROVIDED, HOWEVER, that the corporation may 
modify the extent of such indemnification by individual contracts with its 
directors and executive officers; and, PROVIDED, FURTHER, that the 
corporation shall not be required to indemnify any director or executive 
officer in connection with any proceeding (or part thereof) initiated by such 
person unless (i) such indemnification is expressly required to be made by 
law, (ii) the 

                                      19.

<PAGE>

proceeding was authorized by the Board of Directors of the corporation, (iii) 
such indemnification is provided by the corporation, in its sole discretion, 
pursuant to the powers vested in the corporation under the DGCL or any other 
applicable law or (iv) such indemnification is required to be made under 
subsection (d).

                  (b) OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The 
corporation shall have power to indemnify its other officers, employees and 
other agents as set forth in the DGCL or any other applicable law. The Board 
of Directors shall have the power to delegate the determination of whether 
indemnification shall be given to any such person except executive officers 
to such officers or other persons as the Board of Directors shall determine.

                  (c) EXPENSES. The corporation shall advance to any person 
who was or is a party or is threatened to be made a party to any threatened, 
pending or completed action, suit or proceeding, whether civil, criminal, 
administrative or investigative, by reason of the fact that he is or was a 
director or executive officer, of the corporation, or is or was serving at 
the request of the corporation as a director or executive officer of another 
corporation, partnership, joint venture, trust or other enterprise, prior to 
the final disposition of the proceeding, promptly following request therefor, 
all expenses incurred by any director or executive officer in connection with 
such proceeding upon receipt of an undertaking by or on behalf of such person 
to repay said amounts if it should be determined ultimately that such person 
is not entitled to be indemnified under this Section 43 or otherwise.

         Notwithstanding the foregoing, unless otherwise determined pursuant 
to paragraph (e) of this Section 43, no advance shall be made by the 
corporation to an executive officer of the corporation (except by reason of 
the fact that such executive officer is or was a director of the corporation 
in which event this paragraph shall not apply) in any action, suit or 
proceeding, whether civil, criminal, administrative or investigative, if a 
determination is reasonably and promptly made (i) by the Board of Directors 
by a majority vote of a quorum consisting of directors who were not parties 
to the proceeding, or (ii) if such quorum is not obtainable, or, even if 
obtainable, a quorum of disinterested directors so directs, by independent 
legal counsel in a written opinion, that the facts known to the 
decision-making party at the time such determination is made demonstrate 
clearly and convincingly that such person acted in bad faith or in a manner 
that such person did not believe to be in or not opposed to the best 
interests of the corporation.

                  (d) ENFORCEMENT. Without the necessity of entering into an 
express contract, all rights to indemnification and advances to directors and 
executive officers under this Bylaw shall be deemed to be contractual rights 
and be effective to the same extent and as if provided for in a contract 
between the corporation and the director or executive officer. Any right to 
indemnification or advances granted by this Section 43 to a director or 
executive officer shall be enforceable by or on behalf of the person holding 
such right in any court of competent jurisdiction if (i) the claim for 
indemnification or advances is denied, in whole or in part, or (ii) no 
disposition of such claim is made within ninety (90) days of request 
therefor. The claimant in such enforcement action, if successful in whole or 
in part, shall be entitled to be paid also the expense of prosecuting his 
claim. In connection with any claim for indemnification, the corporation 
shall be entitled to raise as a defense to any such action that the claimant 
has not met the standards of conduct that make it permissible under the DGCL 
or any other applicable law for the corporation to indemnify the claimant for 
the amount claimed. In connection with any 

                                      20.

<PAGE>

claim by an executive officer of the corporation (except in any action, suit 
or proceeding, whether civil, criminal, administrative or investigative, by 
reason of the fact that such executive officer is or was a director of the 
corporation) for advances, the corporation shall be entitled to raise a 
defense as to any such action clear and convincing evidence that such person 
acted in bad faith or in a manner that such person did not believe to be in 
or not opposed to the best interests of the corporation, or with respect to 
any criminal action or proceeding that such person acted without reasonable 
cause to believe that his conduct was lawful. Neither the failure of the 
corporation (including its Board of Directors, independent legal counsel or 
its stockholders) to have made a determination prior to the commencement of 
such action that indemnification of the claimant is proper in the 
circumstances because he has met the applicable standard of conduct set forth 
in the DGCL or any other applicable law, nor an actual determination by the 
corporation (including its Board of Directors, independent legal counsel or 
its stockholders) that the claimant has not met such applicable standard of 
conduct, shall be a defense to the action or create a presumption that 
claimant has not met the applicable standard of conduct. In any suit brought 
by a director or executive officer to enforce a right to indemnification or 
to an advancement of expenses hereunder, the burden of proving that the 
director or executive officer is not entitled to be indemnified, or to such 
advancement of expenses, under this Section 43 or otherwise shall be on the 
corporation.

                  (e) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any 
person by this Bylaw shall not be exclusive of any other right which such 
person may have or hereafter acquire under any applicable statute, provision 
of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders 
or disinterested directors or otherwise, both as to action in his official 
capacity and as to action in another capacity while holding office. The 
corporation is specifically authorized to enter into individual contracts 
with any or all of its directors, officers, employees or agents respecting 
indemnification and advances, to the fullest extent not prohibited by the 
Delaware General Corporation Law, or by any other applicable law.

                  (f) SURVIVAL OF RIGHTS. The rights conferred on any person 
by this Bylaw shall continue as to a person who has ceased to be a director, 
officer, employee or other agent and shall inure to the benefit of the heirs, 
executors and administrators of such a person.

                  (g) INSURANCE. To the fullest extent permitted by the DGCL 
or any other applicable law, the corporation, upon approval by the Board of 
Directors, may purchase insurance on behalf of any person required or 
permitted to be indemnified pursuant to this Section 43.

                  (h) AMENDMENTS. Any repeal or modification of this Section 
43 shall only be prospective and shall not affect the rights under this Bylaw 
in effect at the time of the alleged occurrence of any action or omission to 
act that is the cause of any proceeding against any agent of the corporation.

                  (i) SAVING CLAUSE. If this Bylaw or any portion hereof 
shall be invalidated on any ground by any court of competent jurisdiction, 
then the corporation shall nevertheless indemnify each director and executive 
officer to the full extent not prohibited by any applicable portion of this 
Section 43 that shall not have been invalidated, or by any other applicable 
law. If this Section 43 shall be invalid due to the application of the 
indemnification provisions of

                                      21.

<PAGE>

another jurisdiction, then the corporation shall indemnify each director and 
executive officer to the full extent under any other applicable law.

                   (j) CERTAIN DEFINITIONS. For the purposes of this Bylaw, 
the following definitions shall apply:

                           (1) The term "proceeding" shall be broadly 
construed and shall include, without limitation, the investigation, 
preparation, prosecution, defense, settlement, arbitration and appeal of, and 
the giving of testimony in, any threatened, pending or completed action, suit 
or proceeding, whether civil, criminal, administrative or investigative.

                           (2) The term "expenses" shall be broadly construed 
and shall include, without limitation, court costs, attorneys' fees, witness 
fees, fines, amounts paid in settlement or judgment and any other costs and 
expenses of any nature or kind incurred in connection with any proceeding.

                           (3) The term the "corporation" shall include, in 
addition to the resulting corporation, any constituent corporation (including 
any constituent of a constituent) absorbed in a consolidation or merger 
which, if its separate existence had continued, would have had power and 
authority to indemnify its directors, officers, and employees or agents, so 
that any person who is or was a director, officer, employee or agent of such 
constituent corporation, or is or was serving at the request of such 
constituent corporation as a director, officer, employee or agent of another 
corporation, partnership, joint venture, trust or other enterprise, shall 
stand in the same position under the provisions of this Section 43 with 
respect to the resulting or surviving corporation as he would have with 
respect to such constituent corporation if its separate existence had 
continued.

                           (4) References to a "director," "executive 
officer," "officer," "employee," or "agent" of the corporation shall include, 
without limitation, situations where such person is serving at the request of 
the corporation as, respectively, a director, executive officer, officer, 
employee, trustee or agent of another corporation, partnership, joint 
venture, trust or other enterprise.

                           (5) References to "other enterprises" shall 
include employee benefit plans; references to "fines" shall include any 
excise taxes assessed on a person with respect to an employee benefit plan; 
and references to "serving at the request of the corporation" shall include 
any service as a director, officer, employee or agent of the corporation 
which imposes duties on, or involves services by, such director, officer, 
employee, or agent with respect to an employee benefit plan, its 
participants, or beneficiaries; and a person who acted in good faith and in a 
manner he reasonably believed to be in the interest of the participants and 
beneficiaries of an employee benefit plan shall be deemed to have acted in a 
manner "not opposed to the best interests of the corporation" as referred to 
in this Section 43.

                                      22.

<PAGE>

                                   ARTICLE XII

                                     NOTICES

         SECTION 44.  NOTICES.

                  (a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of
these Bylaws, notice is required to be given to any stockholder, it shall be
given in writing, timely and duly deposited in the United States mail, postage
prepaid, and addressed to his last known post office address as shown by the
stock record of the corporation or its transfer agent.

                  (b) NOTICE TO DIRECTORS. Any notice required to be given to 
any director may be given by the method stated in subsection (a), or by 
overnight delivery service, facsimile, telex or telegram, except that such 
notice other than one which is delivered personally shall be sent to such 
address as such director shall have filed in writing with the Secretary, or, 
in the absence of such filing, to the last known post office address of such 
director.

                  (c) AFFIDAVIT OF MAILING. An affidavit of mailing, executed 
by a duly authorized and competent employee of the corporation or its 
transfer agent appointed with respect to the class of stock affected, 
specifying the name and address or the names and addresses of the stockholder 
or stockholders, or director or directors, to whom any such notice or notices 
was or were given, and the time and method of giving the same, shall in the 
absence of fraud, be prima facie evidence of the facts therein contained.

                  (d) TIME NOTICES DEEMED GIVEN. All notices given by mail or 
by overnight delivery service, as above provided, shall be deemed to have 
been given as at the time of mailing, and all notices given by facsimile, 
telex or telegram shall be deemed to have been given as of the sending time 
recorded at time of transmission.

                  (e) METHODS OF NOTICE. It shall not be necessary that the 
same method of giving notice be employed in respect of all directors, but one 
permissible method may be employed in respect of any one or more, and any 
other permissible method or methods may be employed in respect of any other 
or others.

                  (f) FAILURE TO RECEIVE NOTICE. The period or limitation of 
time within which any stockholder may exercise any option or right, or enjoy 
any privilege or benefit, or be required to act, or within which any director 
may exercise any power or right, or enjoy any privilege, pursuant to any 
notice sent him in the manner above provided, shall not be affected or 
extended in any manner by the failure of such stockholder or such director to 
receive such notice.

                  (g) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL. 
Whenever notice is required to be given, under any provision of law or of the 
Certificate of Incorporation or Bylaws of the corporation, to any person with 
whom communication is unlawful, the giving of such notice to such person 
shall not be required and there shall be no duty to apply to any governmental 
authority or agency for a license or permit to give such notice to such 
person. Any action or meeting which shall be taken or held without notice to 
any such person with whom communication is unlawful shall have the same force 
and effect as if such notice had been duly given. In the event that the 
action taken by the corporation is such as to require the filing of a 

                                      23.

<PAGE>

certificate under any provision of the DGCL, the certificate shall state, if 
such is the fact and if notice is required, that notice was given to all 
persons entitled to receive notice except such persons with whom 
communication is unlawful.

                  (h) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever 
notice is required to be given, under any provision of law or the Certificate 
of Incorporation or Bylaws of the corporation, to any stockholder to whom (i) 
notice of two consecutive annual meetings, and all notices of meetings or of 
the taking of action by written consent without a meeting to such person 
during the period between such two consecutive annual meetings, or (ii) all, 
and at least two, payments (if sent by first class mail) of dividends or 
interest on securities during a twelve-month period, have been mailed 
addressed to such person at his address as shown on the records of the 
corporation and have been returned undeliverable, the giving of such notice 
to such person shall not be required. Any action or meeting which shall be 
taken or held without notice to such person shall have the same force and 
effect as if such notice had been duly given. If any such person shall 
deliver to the corporation a written notice setting forth his then current 
address, the requirement that notice be given to such person shall be 
reinstated. In the event that the action taken by the corporation is such as 
to require the filing of a certificate under any provision of the DGCL, the 
certificate need not state that notice was not given to persons to whom 
notice was not required to be given pursuant to this paragraph.

                                  ARTICLE XIII

                                   AMENDMENTS

         SECTION 45.  AMENDMENTS. Subject to paragraph (h) of Section 43 of 
the Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by the 
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of 
the voting power of all of the then-outstanding shares of the voting stock of 
the corporation entitled to vote. The Board of Directors shall also have the 
power to adopt, amend, or repeal Bylaws.

                                   ARTICLE XIV

                                LOANS TO OFFICERS

         SECTION 46.  LOANS TO OFFICERS. The corporation may lend money to, 
or guarantee any obligation of, or otherwise assist any officer or other 
employee of the corporation or of its subsidiaries, including any officer or 
employee who is a Director of the corporation or its subsidiaries, whenever, 
in the judgment of the Board of Directors, such loan, guarantee or assistance 
may reasonably be expected to benefit the corporation. The loan, guarantee or 
other assistance may be with or without interest and may be unsecured, or 
secured in such manner as the Board of Directors shall approve, including, 
without limitation, a pledge of shares of stock of the corporation. Nothing 
in these Bylaws shall be deemed to deny, limit or restrict the powers of 
guaranty or warranty of the corporation at common law or under any statute.

                                      24.



<PAGE>


                                  OMNICELL.COM

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT


<PAGE>

                                  OMNICELL.COM

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT


         THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement")
is entered into as of the 20th day of January, 2000, by and among OMNICELL.COM,
a California corporation (the "Company") the holders of Series A through J
Preferred Stock set forth on Exhibit A (the "Prior Holders") and the purchasers
of Series K Preferred Stock (the "Purchasers") listed on Exhibit B hereto. The
Prior Holders and the Purchasers are collectively referred to hereinafter as the
"Investors" and each individually as an "Investor."

                                    RECITALS

         WHEREAS, the Company and the Prior Holders are parties to the Series A
Preferred Subscription Agreements entered into on or around October 1992, the
Series B Preferred Subscription Agreements entered into on or around May 1993,
the Series C Preferred Stock Purchase Agreement dated May 14, 1993, the Series D
Preferred Stock Purchase Agreement dated October 25, 1993, the Series E
Preferred Stock Purchase Agreement dated December 22, 1993, the Series F
Preferred Stock Purchase Agreement dated June 8, 1994, the Series G Preferred
issued in May through July 1995, and the Series
 H Preferred Stock Agreement
dated September 18, 1995 (collectively, the "Prior Agreements") pursuant to
which the Company granted the Prior Holders certain participation, registration
and information rights.

         WHEREAS, the Purchasers are purchasing shares of the Company's Series K
Preferred Stock (the "Series K Preferred") pursuant to that certain Series K
Preferred Stock Purchase Agreement (the "Purchase Agreement") of even date
herewith; (the "Financing").

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

         WHEREAS, the Company and the Prior Holders intend that this Agreement
shall supercede the portion of the Prior Agreements related to participation,
registration and information rights, all the Prior Holders shall be deemed to be
parties to this Agreement and that the Prior Agreements shall terminate upon the
Closing of the Financing; and

         WHEREAS, in connection with the consummation of the Financing, the
parties desire to enter into this Agreement in order to grant registration,
information rights and other rights to the Holders and Investors as set forth
below.

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


<PAGE>

SECTION 1. GENERAL.

         1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:

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

                  "Conversion Stock" means the Common Stock issued or issuable
pursuant to conversion of the Company's outstanding Series A Preferred issued
pursuant to the Subscription Agreements on or around October 1992, Series B
Preferred issued pursuant to the Subscription Agreements on or around May 1993,
Series C Preferred issued pursuant to the Series C Preferred Stock Purchase
Agreement dated May 14, 1993, Series D Preferred issued pursuant to the Series D
Preferred Stock Purchase Agreement dated October 25, 1993, Series E Preferred
issued pursuant to the Series E Preferred Stock Purchase Agreement dated
December 22, 1993, the Series F Preferred issued pursuant to the Series F
Preferred Stock Purchase Agreement dated June 8, 1994, the Series G Preferred
issued in May through July 1995, the Series H Preferred issued pursuant to the
Series H Preferred Stock Agreement dated September 18, 1995, the Series J
Preferred issued upon the conversion of the Series I Preferred issued pursuant
to the Series I Preferred Stock Agreement dated June 7, 1996 and the Series K
Preferred issued pursuant to the Purchase Agreement.

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

                  "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any successor or similar registration form under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.

                  "Holder" means any Investor holding Registrable Securities and
purchasers of Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred, Series E Preferred, Series F Preferred, Series G Preferred, or
Series H Preferred (who for purposes of Section 2 of this Agreement, shall be
included in the definition of "Investor") and any persons holding Registrable
Securities to whom the rights under Section 2 have been transferred in
accordance with Section 2.12 hereof.

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

                  "Initiating Holders" shall mean any Holders who in the
aggregate are Holders of at least 40% of the Registrable Securities.

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

                  "Registrable Securities" means (a) Conversion Stock; and 
(b) any Common Stock of the Company issued or issuable in respect of the 
Conversion Stock or other securities issued


<PAGE>

or issuable pursuant to the conversion of the Series A Preferred, Series B 
Preferred, Series C Preferred, Series D Preferred, Series E Preferred, Series 
F Preferred, Series G Preferred, Series H Preferred, Series J Preferred and 
Series K Preferred upon any stock split, stock dividend, recapitalization, or 
similar event, or any Common Stock otherwise issued or issuable with respect 
to such securities; provided however, that shares of Common Stock or other 
securities shall only be treated as Registrable Securities if and so long as 
they have not been (i) sold to or through a broker or dealer or underwriter 
in a public distribution or a public securities transaction or (ii) 
transferred without concurrent transfer of registration rights pursuant to 
Section 2.12. "Registrable Securities then outstanding" shall be the number 
of shares determined by calculating the total number of shares of the 
Company's Common Stock that are Registrable Securities and either (a) are 
then issued and outstanding or (b) are issuable pursuant to then exercisable 
or convertible securities.

                  "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 2.4, 2.5 and 2.6 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and disbursements
not to exceed twenty-five thousand dollars ($25,000) of a single special counsel
for the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).

                  "Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in Section 2.2 hereof.

                   "Securities Act" shall mean the Securities Act of 1933, as 
amended.

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

                  "Shares" shall mean the Company's Preferred Stock held by the
Holders listed on Exhibit A hereto and their permitted assigns.


SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.

         2.1 RESTRICTIONS ON TRANSFERABILITY. The Shares and the Conversion
Stock shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Section 2, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Investor will cause
any proposed purchaser, assignee, transferee, or pledgee of the Shares or the
Conversion Stock held by an Investor to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Section 2.

         2.2 RESTRICTIVE LEGEND. Each certificate representing (i) the Shares,
(ii) the Conversion Stock and (iii) any other securities issued in respect of
the Shares or the Conversion Stock upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall (unless
otherwise permitted by the provisions of Section 2.3 below) be stamped or


<PAGE>

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 (THE "ACT"). SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
          ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER COMPLIES
          WITH THE PROVISIONS OF RULE 144 UNDER THE ACT IN THE OPINION OF
          COUNSEL TO THE COMPANY OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
          REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
          EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
          THE ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES
          AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
          REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
          SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
          CORPORATION.

         Each Purchaser and Holder consents to the Company 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 Section 2.

         Any legend endorsed on a certificate as described above shall be
removed and the Company shall issue a certificate without such legend to the
holder of such security if such security is registered under the Securities Act
or if a notification under Regulation A of the Securities Act is in effect with
respect thereto, or if such security may be sold under Rule 144(k) of the
Commission under the Securities Act.

         2.3 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 2.3. 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 (except in the case of (i) a transfer not involving a change in
beneficial ownership, (ii) a transfer which complies with the provisions of Rule
144 under the Securities Act in the opinion of counsel to the Company, (iii) a
transaction involving the distribution of Restricted Securities by any Holder to
any of its partners, retired partners, or to the estate of any of its partners
or retired partners, or to such Holder's spouse, siblings, spouse of such
siblings, ancestors and descendants and any trust established solely for such
Holder's benefit or for the benefit of such Holder's spouse, siblings, ancestors
and/or descendants, or to such Holder's "affiliates", as defined under the
Securities Act), at such Holder's expense, by either (i) a 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 proposed
that 


<PAGE>

the 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. 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 2.2 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 provision
of the Securities Act.

         2.4 REQUESTED 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 such Initiating
Holders' Registrable Securities where the reasonably anticipated aggregate
offering price to the public, net of underwriting discounts and commissions,
would exceed $5,000,000, the Company shall:

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

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

         Provided, however, that the Company shall not be obligated to file a
registration statement to effect any such registration, qualification or
compliance pursuant to this Section 2.4:

                                    (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) Starting on a date sixty (60) days prior
to and ending on a date four months immediately following the effective date of
any registration statement pertaining to the securities of the Company (other
than a registration of securities in a Rule 145 transaction or with respect to
an employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to become
effective;


<PAGE>

                                    (C) After (i) the Company has effected two
such registrations pursuant to this Section 8.5 (provided such Holders are able
to register at least 90% of the shares of Registrable Securities for which they
requested registration) and (ii) each such registration has been declared or
ordered effective; 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 2.4 shall be deferred for a
period not to exceed 120 days from the date of receipt of written request from
the Initiating Holders.

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, after receipt of the request or requests of
the Initiating Holders.

                  (b) UNDERWRITING. In the event that the Initiating Holders
specify that a registration pursuant to Section 2.4 is for a registered public
offering involving an underwriting, the Company shall so advise the Holders as
part of the notice given pursuant to Section 2.4(a)(i). In such event, the right
of any Holder to registration pursuant to Section 2.4 shall be conditioned upon
such Holder's participation in the underwriting arrangements required by this
Section 2.4, and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided
herein.

         The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter of nationally recognized
standing selected for such underwriting by a majority in interest of the
Initiating Holders, but subject to the Company's reasonable approval.
Notwithstanding any other provision of this Section 2.4, 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
Company shall so advise all holders of Registrable Securities who have elected
to participate in such offering 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 held by such Holders 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, or such other shorter period of time as the underwriters
may permit. 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 then imposed by the
underwriters), then the Company shall offer to all Holders, if any, whose shares
have been 


<PAGE>

excluded from the registration by the terms of this paragraph, the right to
include additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 2.4(b) up to the
limitation then imposed by the Underwriters.

         2.5 COMPANY REGISTRATION.

                  (a) NOTICE OF REGISTRATION. If at any time or from time to
time the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
relating solely to a Commission Rule 145 transaction or (iii) a registration in
which the only Common Stock being registered is Common Stock issuable upon
conversion of convertible debt securities which are also being registered, 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.

                  (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 2.5(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.5 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein.

                           All Holders  proposing to distribute their securities
through such underwriting shall (together with the Company and the other Holders
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. If the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may exclude some or all Registrable Securities
from such registration and underwriting and then the Company shall so advise all
Holders of Registrable Securities who have elected to participate in such
offering 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 held by such Holders at the time of filing the
registration statement but the foregoing shall not be interpreted to require any
cutback in the number of shares to be sold by the Company in such an offering.
Notwithstanding the above, in the event of an offering other than the Company's
initial public offering, the number of Registrable Securities included in such
offering shall not be reduced to less than 20% of the shares to be offered in
such offering.

                           If any Holder disapproves of the terms of any such 
underwriting, such person 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. If by the
withdrawal of such Registrable Securities a greater number of 


<PAGE>

Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation then imposed by the
underwriters), then the Company shall offer to all Holders, if any, whose shares
have been excluded from the registration by the terms of this paragraph, the
right to include additional Registrable Securities in the same proportion used
in determining the underwriter limitation in this Section up to the limitation
then imposed by the Underwriters.

                  (c) RIGHT TO TERMINATE REGISTRATION. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.5 prior to the effectiveness of such registration whether or not any
Holder elected to include securities in such registration.

         2.6 REGISTRATION ON FORM S-3.

                  (a) If a Holder or Holders request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities, the reasonably
anticipated aggregate price to the public of which, net of underwriting
discounts and commissions, would exceed $1,000,000, and the Company is a
registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder or Holders may reasonably request; provided, however, that the Company
shall not be required to effect more than four registrations pursuant to this
Section 2.6. The substantive provisions of Section 2.4(b) shall be applicable to
each registration initiated under this Section 2.6. The Company shall give
notice to all Holders of Registrable Securities of the receipt of a request for
registration pursuant to this Section 2.6 and shall provide a reasonable
opportunity for other Holders to participate in the registration.

                  (b) Notwithstanding the foregoing, the Company shall not be
obligated to file a registration statement pursuant to this Section 2.6:

                           (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) if the Company, within ten (10) days of the
receipt of the request of the initiating Holders, gives notice of its bona fide
intention to effect the filing of a registration statement with the Commission
within ninety (90) days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction or an offering solely
to employees);

                           (iii) starting with a date sixty (60) days prior to,
and ending on a date four months immediately following, the effective date of
any registration statement pertaining to the securities of the Company (other
than a registration of securities in a Rule 145 transaction or with respect to
an employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to become
effective;


<PAGE>

                           (iv) if the shares held by such Holder can be sold
pursuant to Rule 144 within a three month period of the date of the request for
a registration under this Section 2.6 and the applicable Holder holds less than
two (2%) percent of the outstanding voting stock of the Company; or

                           (v) 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 file a
registration statement shall be deferred for a period not to exceed one hundred
twenty (120) days from the receipt of the request to file such registration by
such Holder.

         2.7 EXPENSES OF REGISTRATION.

                  All Registration Expenses incurred in connection with all
registrations pursuant to Sections 2.4, 2.5 and 2.6 shall be borne by the
Company. Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Holders shall be borne by the Holders of such
securities pro rata on the basis of the number of shares so registered and sold.

         2.8 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof, including any stop order or other proceeding initiated with respect to
such offering. At its expense the Company will:

                  (a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least two (2) years
or until the distribution described in the Registration Statement has been
completed, whichever first occurs; and

                  (b) Furnish to the Holders participating in such registration
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such Holders may
reasonably request.


<PAGE>

         2.9 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
Section 2, 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 the Securities Act or any
state securities law or any rule or regulation promulgated thereunder 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 expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by any Holder, controlling person or
underwriter and stated to be specifically for use therein; provided, however,
that the foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any such untrue statement, alleged untrue statement, omission
or alleged omission made in a preliminary prospectus on file with the Commission
at the time the registration statement becomes effective or the amended
prospectus filed with the Commission pursuant to Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter, if a copy of the Final Prospectus was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act and such failure to furnish such Final
Prospectus was the cause of such loss, liability, claim or damage.

                  (b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify 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 liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material 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, 


<PAGE>

underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, 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 foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any untrue statement, alleged untrue statement, omission or alleged omission
made in a preliminary prospectus on file with the Commission at the time the
registration statement becomes effective or in the Final Prospectus, such
indemnity agreement shall not inure to the benefit of any underwriter or any
Holder, if there is no underwriter, if a copy of the Final Prospectus was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act and such failure
to furnish such Final Prospectus was the cause of such loss, liability, claim or
damage. Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the net proceeds received
for the shares sold by such Holder.

                  (c) Each party entitled to indemnification under this Section
2.9 (the "Indemnified Party") shall give written notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and the Indemnifying Party shall have the option 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 Section 2 unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses. No claim may be settled without the consent of
the Indemnifying Party (which consent shall not be unreasonably withheld). No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.

         2.10 INFORMATION BY HOLDER. Each Holder holding Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Registrable Securities held by them and the distribution proposed
by such Holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 2.


<PAGE>

         2.11 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, 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 of the Initial Offering, as defined below;

                  (b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (at any time
after it has become subject to such reporting requirements); and

                  (c) So long as a Purchaser owns any Restricted Securities, to
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Securities Exchange Act of 1934 (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.

         2.12 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company
to register securities granted Holders under Sections 2.4, 2.5 and 2.6 may be
assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Purchaser provided that: (i) such
transfer shall otherwise be effected in accordance with applicable securities
laws, (ii) such assignee or transferee acquires at least 100,000 shares
(adjusted for stock splits, reverse splits, reorganizations and the like) of
Registrable Securities, (iii) written notice is promptly given to the Company,
(iv) such transferee agrees to be bound by the provisions of this Section 2 and
(v) such Holder obtains the prior written consent of the Company, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, the rights to
cause the Company to register securities may be assigned to any constituent
partner or affiliate of a Holder or to such Holder's spouse, siblings, spouse of
such siblings, ancestors and descendants and any trust established solely for
such Holder's benefit or for the benefit of such Holder's spouse, siblings,
ancestors and/or descendants, without compliance with item (ii) above, provided
written notice thereof is promptly given to the Company.

         2.13 LOCKUP AGREEMENT. Each holder of Registrable Securities and each
transferee pursuant to Section 2 hereof agrees, in connection with any
registration of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriter, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such 


<PAGE>

registration as the Company or the underwriters may specify; provided that these
obligations shall apply only to the Initial Offering and not to any subsequent
registration of the Company's securities; and provided further that this Section
2.13 shall apply only if all officers and directors of the Company who hold
shares of stock or options to purchase common stock have signed agreements with
the underwriters containing similar restrictions. The holders of Registrable
Securities agree that the Company may instruct its transfer agent to place
stop-transfer notations in its records to enforce the provisions of this Section
2.13.

         2.14 TERMINATION. The registration rights granted pursuant to this
Section 2 shall terminate on the fifth anniversary of the closing of the Initial
Offering.

SECTION 3. COVENANTS OF THE COMPANY.

         3.1 BASIC FINANCIAL INFORMATION AND REPORTING.

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

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

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

         3.2 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Company
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or confidential information to any partner, subsidiary or parent of
such Investor for the purpose of 


<PAGE>

evaluating its investment in the Company as long as such partner, subsidiary or
parent is advised of the confidentiality provisions of this Section 3.3.

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

         3.4 APPOINTMENT OF AUDIT COMMITTEE MEMBER. The Company will take all
actions within its control to cause the appointment of the representative of the
Series K Preferred on the Company's Board of Directors as a member of the Audit
Committee of the Company's Board of Directors.

         3.5 TERMINATION OF COVENANTS. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor upon
the earlier of (i) the effective date of the registration statement pertaining
to the Initial Offering, which results in the Preferred Stock being converted
into Common Stock or (ii) upon (a) the sale, lease or other disposition of all
or substantially all of the assets of the Company or (b) an acquisition of the
Company by another corporation or entity by consolidation, merger or other
reorganization in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, PROVIDED that this
Section 3.5 shall not apply to a merger effected exclusively for the purpose of
changing the domicile of the Company (a "Change in Control").

SECTION 4. RIGHTS OF FIRST REFUSAL.

         The Company hereby grants to each Investor the right of first refusal
to purchase, pro rata, a portion of "New Securities" (as defined in this Section
4) that the Company may, from time to time, propose to sell and issue. Each
Investor's pro rata share, for purposes of this right of first refusal, is the
ratio (as of the record date set for determining which of the Company's
shareholders are entitled to such right of first refusal) of (X) the number of
shares of Common Stock owned or issuable (calculated after giving effect to any
anti-dilution adjustment as a result of such issuance) upon the conversion of
the Preferred Stock owned by such Investor to (Y) the total number of shares of
Common Stock outstanding or issuable (calculated after giving effect to any
anti-dilution adjustment as a result of such issuance) upon the conversion of
all outstanding Preferred Stock. This right of first refusal shall be subject to
the following provisions:

                  (a) "NEW SECURITIES" shall mean any Common Stock and Preferred
Stock of the Company whether or not authorized on the date hereof, and rights,
options, or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible into said
Common Stock or Preferred Stock; provided, however, that "New Securities" does
not include the following:

                           (i) all shares of Common Stock, or options to
purchase shares of Common Stock, issued or granted to officers, directors,
employees and consultants of the 


<PAGE>

Company pursuant to stock and option plans or arrangements approved by the Board
of Directors;

                           (ii) shares of Common Stock issuable upon conversion
of any of the Company's Preferred Stock;

                           (iii) securities of the Company offered to the public
pursuant to a registration statement filed under the Securities Act;

                           (iv) securities of the Company issued pursuant to the
acquisition of another corporation by the Company by merger, purchase of
substantially all of the assets, or other reorganization whereby the Company
owns not less than fifty-one percent (51%) of the voting power of such other
corporation;

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

                           (vi) shares of Common Stock or Preferred Stock (or
options or warrants therefore) issued in connection with bona fide equipment,
accounts receivable, or other similar debt financing undertaken with a leasing
company, bank, or other financial institution regularly engaged in the business
of lending money.

                  (b) In the event that the Company proposes to undertake an
issuance of New Securities, it shall give each Investor written notice of its
intention, describing the number and type of New Securities, the price, the
general terms upon which the Company proposes to issue the same, and Investor's
pro rata share of the New Securities. Each Investor shall have ten (10) business
days from the date such notice is given to agree to purchase up to its pro rata
share of such New Securities at the price and upon the general terms specified
in the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased.

                  (c) The Company shall have ninety (90) days after giving the
notice referred to above to sell (or enter into an agreement pursuant to which
the sale of New Securities covered thereby shall be closed, if at all, within
thirty (30) days from the date of such agreement) with the New Securities
respecting which the Investor's rights were not exercised at a price and upon
general terms no more favorable to the purchasers thereof than specified in the
Company's notice. In the event the Company has not sold the New Securities
within such ninety (90) day period (or sold and issued New Securities in
accordance with the foregoing within thirty (30) days from the date of such
agreement), the Company shall not thereafter issue or sell any New Securities
without first offering such New Securities to the Purchasers in the manner
provided above.

                  (d) The right of first refusal granted under this Agreement
shall expire upon the date of the Initial Offering.

                  (e) This right of first refusal can be assigned, but only in
connection with an assignment of the Shares, and not to a party who is, or who
has an interest in, a competitor or potential competitor of the Company, as
determined by the Company's Board of Directors.


<PAGE>

                  (f) This right of first refusal shall not apply to Investors
who no longer own any Shares or Common Stock issuable upon conversion thereof as
of the date of the notice referred to above.

SECTION 5. MISCELLANEOUS.

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

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

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

         5.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Purchase Agreement and the other documents delivered pursuant
thereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and no party shall be liable or bound
to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein. Sections 8 and 9
of each of the Prior Agreements which relate to participation, registration and
information rights shall terminate and be superceded by this Agreement

         5.5 SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. 5.6 AMENDMENT AND WAIVER.

                  (a) Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the written consent of the Company and the
holders of at least a majority of the Registrable Securities; PROVIDED, HOWEVER,
that this Agreement may not be amended or modified to adversely affect the
Series K Preferred differently than any other series of Preferred Stock without
the approval of at least a majority of the shares of Series K Preferred.


<PAGE>

                  (b) Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of at least a majority of the
Registrable Securities; PROVIDED, HOWEVER, that the obligations under this
Agreement may not be waived to adversely affect the Series K Preferred
differently than any other series of Preferred Stock without the approval of at
least a majority of the shares Series K Preferred.

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

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

         5.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed electronic mail or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the party to be notified at the address as set forth on the signature
pages hereof or Exhibit A hereto or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.

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

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

         5.11 ADDITIONAL INVESTORS.

                  (a) Notwithstanding anything to the contrary contained herein,
if the Company shall issue additional shares of its Preferred Stock pursuant to
the Purchase Agreement, any purchaser of such shares of Preferred Stock may
become a party to this 


<PAGE>

Agreement by executing and delivering an additional counterpart signature page
to this Agreement and shall be deemed an "Investor" hereunder.

                  (b) Notwithstanding anything to the contrary contained herein,
if the Company shall issue Equity Securities in accordance with Section 4(iv) or
(vi) of this Agreement, any purchaser of such Equity Securities may become a
party to this Agreement by executing and delivering an additional counterpart
signature page to this Agreement and shall be deemed an "Investor" hereunder.

         5.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.



                      [THIS SPACE INTENTIONALLY LEFT BLANK]


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:  /s/ Earl E. Fry                       By:                        
     ------------------------------           ---------------------------------
     Earl E. Fry                                 John D. Stobo, Jr.
     Vice President and                          Managing Member
     Chief Financial Officer           


                                           PURCHASER:
                                                     --------------------------
                                           By:                                
                                              --------------------------------
                                           Name:                              
                                                ------------------------------
                                           Title:                             
                                                 -----------------------------
PRIOR HOLDERS:

SHAREHOLDER:
            -----------------------
By:
   --------------------------------
Print Name:                                
           ------------------------
Title:                                     
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By: /s/ John D. Stobo, Jr.         
   --------------------------------          ----------------------------------
         Earl E. Fry                                John D. Stobo, Jr.
         Vice President and                         Managing Member
         Chief Financial Officer


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

PRIOR HOLDERS:

SHAREHOLDER:
            -----------------------
By:                                                  
   --------------------------------
Print Name:                                          
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: SHELDON ASHER TRUST

By: /s/ Sheldon D. Asher                   
   --------------------------------

Print Name: Sheldon D. Asher                   
           ------------------------
Title:                                     
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



                                           PURCHASER:
                                                     --------------------------
                                           By:                                
                                              ---------------------------------

                                           Name:                              
                                                -------------------------------

                                           Title:                             
                                                 ------------------------------

PRIOR HOLDERS:

SHAREHOLDER: HB ATKINSON CHARITABLE
 TRUST

By: /s/ John C. Atkinson                             
   --------------------------------

Print Name: John C. Atkinson                             
           ------------------------

Title: Trustee                                       
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: DELPHI VENTURES II, L.P.
         BY: DELPHI MANAGEMENT PARTNERS II, L.P.
         GENERAL PARTNER

By: /s/ Donald J. Lothrop                            
   --------------------------------
Print Name: Donald J. Lothrop                            
           ------------------------
Title:  General Partner                              
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: DELPHI BIOINVESTMENTS II, L.P.
         BY: DELPHI MANAGEMENT PARTNERS II, L.P.
         GENERAL PARTNER

By: /s/ Donald J. Lothrop                            
   --------------------------------
Print Name: Donald J. Lothrop                            
           ------------------------
Title:  General Partner                              
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: CHRISTOPHER J. DUNN

By: /s/ Christopher J. Dunn                          
   --------------------------------
Print Name: Christopher J. Dunn, MD                  
           ------------------------
Title: MD                                            
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:       
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: JAMES C. GAITHER

By: /s/ James C. Gaither                             
   --------------------------------
Print Name: James C. Gaither
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: THE INDIVIDUALS VENTURE FUND (1994) LP

By: /s/ Roger Barry                                  
   --------------------------------
Print Name: Roger Barry
           ------------------------
Title: Managing Member                      
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: DELBERT A. LIPPS

By: /s/ Delbert A. Lipps                             
   --------------------------------
Print Name: Delbert A. Lipps
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE



<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR DAVID A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee                    
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR ELIZABETH A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR JOSHUA A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR MARY MARGARET A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR NATHAN A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR SARAH A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: RANDALL A. LIPPS

CUSTODIAN UNDER CUTMA FOR ZACHARY A. LIPPS

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title: Custodian/Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: BENJAMIN LIPPS IRREVOCABLE TRUST

By: /s/ Randall A. Lipps                             
   --------------------------------
Print Name: Randall A. Lipps
           ------------------------
Title:         Trustee
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: MEDICUS VENTURE PARTNERS 1993, A CALIFORNIA LIMITED PARTNERSHIP

By: MEDICUS MANAGEMENT PARTNERS,
       GENERAL PARTNER

By: /s/ Frederick J. Dotzler                         
   --------------------------------
Print Name: Frederick J. Dotzler                     
           ------------------------
Title: General Partner                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



                                           PURCHASER:
                                                     --------------------------
                                           By:                                 
                                              ---------------------------------
                                           Name:                               
                                                -------------------------------
                                           Title:                              
                                                 ------------------------------
                                                                               
PRIOR HOLDERS:

SHAREHOLDER: MEDICUS VENTURE PARTNERS 1994, A CALIFORNIA LIMITED PARTNERSHIP

BY: MEDICUS MANAGEMENT PARTNERS,
       GENERAL PARTNER

By: /s/ Frederick J. Dotzler                         
   --------------------------------
Print Name: Frederick J. Dotzler                     
           ------------------------
Title: General Partner                               
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: MEDICUS VENTURE PARTNERS 1995, A CALIFORNIA LIMITED PARTNERSHIP

BY: MEDICUS MANAGEMENT PARTNERS,
       GENERAL PARTNER

By: /s/ Frederick J. Dotzler                         
   --------------------------------
Print Name: Frederick J. Dotzler                     
           ------------------------
Title: General Partner                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: NASSAU CAPITAL PARTNERS L.P.

BY: NASSAU CAPITAL LLC, ITS GENERAL PARTNER

By: /s/ Randall A. Hack                              
   --------------------------------
Print Name: Randall A. Hack                          
           ------------------------ 
Title: Member                                        
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: NAS PARTNERS I, LLC


By: /s/ Randall A. Hack                              
   --------------------------------
Print Name: Randall A. Hack                          
           ------------------------
Title: Member                                        
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: OAK VI AFFILIATES FUND


By: /s/ Edward F. Glassmeyer                         
   --------------------------------
Print Name: Edward F. Glassmeyer                     
           ------------------------  
Title:                                               
      -----------------------------
Managing Member of Oak VI Affiliates, LLC.
The General Partner of
Oak VI Affiliates Fund,
Limited Partnership


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: OAK INVESTMENT PARTNERS, VI, LIMITED PARTNERSHIP


By: /s/ Edward F. Glassmeyer                         
   --------------------------------
Print Name: Edward F. Glassmeyer                     
           ------------------------
Title:                                               
      -----------------------------

Managing Member of Oak Associates VI, LLC.
The General Partner of
Oak Investment Partners VI,
Limited Partnership


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: PANTHEON INTERNATIONAL PARTICIPATIONS


By: /s/ R.M. Swire
   --------------------------------
Print Name: R.M. Swire                               
           ------------------------
Title:            Director                  
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: SEQUOIA CAPITAL VI
             SEQUOIA TECHNOLOGY PARTNERS VI
             SEQUOIA 1995


By: /s/ Thomas F. Stephenson                         
   --------------------------------
Print Name: Thomas F. Stephenson                     
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: TIMOTHY J. AND OVEL G. SHEEHAN


By: /s/ Timothy J. Sheehan                           
   --------------------------------
Print Name: Timothy J. Sheehan                       
           ------------------------
Title:            Trustee                            
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: DENNIS J. SHEEHAN


By: /s/ Dennis J. Sheehan                            
   --------------------------------
Print Name: Dennis J. Sheehan                        
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                        
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: ERIC F. SHEEHAN


By: /s/ Dennis J. Sheehan                            
   --------------------------------
Print Name: Dennis J. Sheehan                        
           ------------------------
Title:            Custodian                          
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: BENJAMIN SHEEHAN


By: /s/ Dennis J. Sheehan                            
   --------------------------------
Print Name: Dennis J. Sheehan                        
           ------------------------
Title:            Custodian                          
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: SHARON A. SHEEHAN


By: /s/ Sharon A. Sheehan                            
   --------------------------------
Print Name: Sharon A. Sheehan                        
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: SUTTER HILL VENTURES, A CALIFORNIA LIMITED PARTNERSHIP


By: /s/ William H. Younger, Jr.                      
   --------------------------------
Print Name: William H. Younger, Jr.                  
           ------------------------
Title: Managing Director of the General Partner
      -----------------------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: TOW PARTNERS, L.P.


By: /s/ Paul M. Wythes                               
   --------------------------------
Print Name: Paul M. Wythes                           
           ------------------------
Title:   General Partner                    
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: WILLIAM H. YOUNGER, JR.


By: /s/ William H. Younger, Jr.                      
   --------------------------------
Print Name: William H. Younger, Jr.                  
           ------------------------
Title:                                               
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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

COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L.P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER

By:                                        By:                                 
   --------------------------------           ---------------------------------
                                                    John D. Stobo, Jr.
                                                    Managing Member



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

PRIOR HOLDERS:

SHAREHOLDER: THE YOUNGER LIVING TRUST


By: /s/ William H. Younger, Jr.                      
   --------------------------------
Print Name: William H. Younger, Jr.                  
           ------------------------
Title:   Trustee                                     
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
          Earl E. Fry                                John D. Stobo, Jr.
          Vice President and Chief                    Managing Member
          Financial Officer


                                           SUTTER HILL VENTURES,
                                           A CALIFORNIA LIMITED PARTNERSHIP



                                           By: /s/ William H. Younger, Jr.
                                              ---------------------------------
                                           Name: William H. Younger, Jr.
                                                 Managing Director of the
                                                 General Partner


PRIOR HOLDERS:

SHAREHOLDER:
            -----------------------
By:
   ---------------------------------
Print Name:
           -------------------------
Title:
      ------------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
           Earl E. Fry                                John D. Stobo, Jr.
           Vice President and Chief                     Managing Member
           Financial Officer


                                           SUTTER HILL ENTREPRENEURS FUND (AI),
                                           L.P.

                                           By: /s/ William H. Younger, Jr.

                                           Name: William H. Younger, Jr.
                                                 Managing Director of the
                                                 General Partner




PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
           Earl E. Fry                                John D. Stobo, Jr.
           Vice President and Chief                    Managing Member
           Financial Officer


                                           SUTTER HILL ENTREPRENEURS FUND (QP),
                                           L.P.

                                           By: /s/ William H. Younger, Jr.

                                           Name: William H. Younger, Jr.
                                                 Managing Director of the 
                                                 General Partner


PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
           Earl E. Fry                                John D. Stobo, Jr.
           Vice President and Chief                    Managing Member
           Financial Officer


                                           THE ANDERSON LIVING TRUST, U/A/D
                                           1/22/98

                                           By: /s/ David L. Anderson
                                                   David L. Anderson, Trustee


PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           ANVEST, L.P.

                                           By: /s/ David L. Anderson
                                                   David  L.  Anderson,
                                                   General Partner
PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           G. LEONARD BAKER, JR.

                                           By: /s/ G. Leonard Baker Jr.


PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           SAUNDERS HOLDINGS, L.P.

                                           By: /s/ G. Leonard Baker, Jr.
                                                   G. Leonard Baker, Jr.,
                                                   General Partner

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           THE YOUNGER LIVING TRUST, U/A/D 
                                           1/20/95

                                           By: /s/ William H. Younger, Jr.
                                                   William H. Younger, Jr.,
                                                   Trustee

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           TENCH COXE, TRUSTEE,
                                           THE TAMERLANE CHARITABLE REMAINDER 
                                           UNITRUST

                                           By: /s/ Tenche Coxe
                                                   Tenche Coxe, Trustee

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           PAUL M. & MARSHA R. WYTHES, TRUSTEES
                                           THE WYTHES LIVING TRUST (7/21/87)

                                           By: /s/ Sherryl W. Hossack
                                           Sherryl W. Hossack under Power of 
                                           Attorney
PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           TOW PARTNERS,
                                           A CALIFORNIA LIMITED PARTNERSHIP

                                           By: /s/ Sherryl W. Hossack
                                           Sherryl W. Hossack under Power of 
                                           Attorney

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           WYTHES 1999 GRANDCHILDREN'S TRUST
                                           JENNIFER W. VETTEL, PAUL M. WYTHES, 
                                           LINDA W. KNOLL, TRUSTEES

                                           By: /s/ Sherryl W. Hossack
                                           Sherryl W. Hossack under Power of 
                                           Attorney

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           GREGORY P. SANDS

                                           By: /s/ Gregory P. Sands


PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           LAWRENCE EBRINGER

                                           By: /s/ Lawrence Ebringer


PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           JAMES C. GAITHER

                                           By: /s/ Sherryl W. Hossack
                                           Sherryl W. Hossack under Power of 
                                           Attorney

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           RONALD L. PERKINS

                                           By: /s/ Sherryl W. Hossack
                                           Sherryl W. Hossack under Power of 
                                           Attorney

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           WELLS FARGO BANK, TRUSTEE
                                           SHV M/P/T FBO SHERRYL W. HOSSACK

                                           By: /s/ Vicki M. Bandel
                                                    Vicki M. Bandel
                                                    Asst. V.P. and Trust Officer

                                           By: /s/ S. Matson
                                                    S. Matson
                                                    Asst. V.P. and Trust Officer
PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           WELLS FARGO BANK, TRUSTEE
                                           SHV M/P/T FBO MICHELE Y. PHUA

                                           By: /s/ Vicki M. Bandel
                                                    Vicki M. Bandel
                                                    Asst. V.P. and Trust Officer

                                           By: /s/ S. Matson
                                                    S. Matson
                                                    Asst. V.P. and Trust Officer

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           GENSTAR INVESTMENT CORPORATION

                                           By: /s/ Richard D. Paterson

                                           Name: Richard D. Paterson

                                           Title: Executive Vice President

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           NAS PARTNERS I

                                           By: /s/ Randall A. Hack

                                           Name: Randall A. Hack

                                           Title: Member

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           NASSAU CAPITAL PARTNERS

                                           By: /s/ Randall A. Hack

                                           Name: Randall A. Hack

                                           Title: Member

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           FRED A. DOTZLER

                                           By: /s/ Fred Dotzler
                                                  Fred Dotzler
                                                  as an individual

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           COMMERCE ONCE, INC.

                                           By: /s/ Robert M. Tarkoff

                                           Name: Robert M. Tarkoff

                                           Title: Senior VP & General Counsel

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>


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


COMPANY:                                   PURCHASERS:

OMNICELL.COM                               ABS CAPITAL PARTNERS III, L. P.
                                           BY:  ABS PARTNERS III, LLC
                                           ITS:  GENERAL PARTNER


Signature:                                 By:
          -------------------------           ---------------------------------
            Earl E. Fry                                John D. Stobo, Jr.
            Vice President and Chief                     Managing Member
            Financial Officer


                                           FFT PARTNERS II, L.P.

                                           By: FFT GP II, LLC

                                           Its: General Partner

                                           By: /s/ Carlos A. Ferrer
                                                  Carlos A. Ferrer
                                                  Member

PRIOR HOLDERS:

SHAREHOLDER:
            ----------------------
By:
   --------------------------------
Print Name:
           ------------------------
Title:
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS: GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________

PRIOR HOLDERS:

SHAREHOLDER: PANTHEON INTERNATIONAL PARTICIPATIONS

By: /s/ R.M. Swire
   --------------------------------

Print Name: R.M. Swire
           ------------------------

Title:            Director         
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________

PRIOR HOLDERS:

SHAREHOLDER: SEQUOIA CAPITAL VI
             SEQUOIA TECHNOLOGY PARTNERS VI
             SEQUOIA 1995

By: /s/ Thomas F. Stephenson                         
   --------------------------------

Print Name: Thomas F. Stephenson                     
           ------------------------

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: TIMOTHY J. AND OVEL G. SHEEHAN

By: /s/ Timothy J. Sheehan                           
   --------------------------------

Print Name: Timothy J. Sheehan                       
           ------------------------

Title:            Trustee                            
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: Dennis J. Sheehan

By: /s/ Dennis J. Sheehan                            
-----------------------------------

Print Name: Dennis J. Sheehan                        
-----------------------------------

Title:_____________________________
     

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: MATTHEW J. SHEEHAN

By: /s/ Dennis J. Sheehan                            
   --------------------------------

Print Name: Dennis J. Sheehan                        
           ------------------------

Title:            Custodian                          
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: DENNIS AND SHARON SHEEHAN

By: /s/ Dennis J. Sheehan                            
   --------------------------------

Print Name: Dennis J. Sheehan                        
           ------------------------

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: ERIC F. SHEEHAN

By: /s/ Dennis J. Sheehan                            
   --------------------------------

Print Name: Dennis J. Sheehan                        
           ------------------------

Title:            Custodian                          
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: BENJAMIN SHEEHAN

By: /s/ Dennis J. Sheehan                            
   --------------------------------

Print Name: Dennis J. Sheehan                        
           ------------------------

Title:            Custodian                          
      -----------------------------


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: SHARON A. SHEEHAN

By: /s/ Sharon A. Sheehan                            
   --------------------------------

Print Name: Sharon A. Sheehan                        
           ------------------------

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: SUTTER HILL VENTURES, A CALIFORNIA LIMITED PARTNERSHIP

By: /s/ William H. Younger, Jr.                      
   --------------------------------

Print Name: William H. Younger, Jr.                  
           ------------------------

Title:   Managing Director Of The General Partner
      -------------------------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: TOW PARTNERS, L.P.

By: /s/ Paul M. Wythes                               
   --------------------------------

Print Name: Paul M. Wythes                           
           ------------------------

Title:   General Partner                    
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: William H. Younger, Jr.

By: /s/ William H. Younger, Jr.                      
   --------------------------------

Print Name: William H. Younger, Jr.                  
           ------------------------

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

By:________________________________    By:________________________________
                                                John D. Stobo, Jr.
                                                Managing Member

                                       PURCHASER:_________________________

                                       By:________________________________

                                       Name:______________________________

                                       Title:_____________________________


PRIOR HOLDERS:

SHAREHOLDER: THE YOUNGER LIVING TRUST

By: /s/ William H. Younger, Jr.                      
   --------------------------------

Print Name: William H. Younger, Jr.                  
           ------------------------

Title:   Trustee                                     
      -----------------------------

                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

Signature:_________________________    By:________________________________
           Earl E. Fry                           John D. Stobo, Jr.
           Vice President and                    Managing Member
           Chief Financial Officer


                                       SUTTER HILL VENTURES,
                                       A CALIFORNIA LIMITED PARTNERSHIP

                                       By: /s/ William H. Younger, Jr.

                                       Name: William H. Younger, Jr.
                                             Managing Director of 
                                             the General Partner

PRIOR HOLDERS:

SHAREHOLDER:_______________________

By:________________________________

Print Name:________________________

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

Signature:_________________________    By:________________________________
           Earl E. Fry                           John D. Stobo, Jr.
           Vice President and                    Managing Member
           Chief Financial Officer


                                       SUTTER HILL ENTREPRENEURS FUND (AI), L.P.

                                       By: /s/ William H. Younger, Jr.

                                       Name: William H. Younger, Jr.
                                             Managing Director of 
                                             the General Partner

PRIOR HOLDERS:

SHAREHOLDER:_______________________

By:________________________________

Print Name:________________________

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE


<PAGE>

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

COMPANY:                               PURCHASERS:

OMNICELL.COM                           ABS CAPITAL PARTNERS III, L.P.
                                       BY:  ABS PARTNERS III, LLC
                                       ITS:  GENERAL PARTNER

Signature:_________________________    By:________________________________
           Earl E. Fry                           John D. Stobo, Jr.
           Vice President and                    Managing Member
           Chief Financial Officer


                                       SUTTER HILL ENTREPRENEURS FUND (QP), L.P.

                                       By: /s/ William H. Younger, Jr.

                                       Name: William H. Younger, Jr.
                                             Managing Director of 
                                             the General Partner


PRIOR HOLDERS:

SHAREHOLDER:_______________________

By:________________________________

Print Name:________________________

Title:_____________________________


                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE




<PAGE>
 
                                                                     EXHIBIT 4.3

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
     1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED
     IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
     OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY
     SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
     UNDER THE SECURITIES ACT OF 1933.

                               WARRANT AGREEMENT

             To Purchase Shares of the Series C Preferred Stock of

                          OmniCell Technologies, Inc.

                        Dated as of September 30, 1993

     Whereas, OmniCell Technologies, Inc., a California corporation (the
"Company") has entered into a Master Lease Agreement dated as of September 30,
1993, Equipment Schedule No. VL-1, and related Summary Equipment Schedules (the
"Leases") with COMDISCO, Inc., a Delaware corporation (the "Warrantholder"); and

     Whereas, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Series C Preferred Stock;

     Now, Therefore, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder certify and agree as follows:

1.   GRANT OF THE RIGHT
 TO PURCHASE PREFERRED STOCK.

     For value received, the Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase, from the Company 12,500
fully paid and non-assessable shares of the Company's Series C Preferred Stock
("Preferred Stock") The exercise price ("Exercise Price") shall be equal to
$1.60 per share.  Notwithstanding the above, if the Company completes the Series
D Preferred Stock financing ("Next Round") by December 1, 1993, then this
Warrant shall be exercisable for 9,217 fully paid and assessable shares of the
Company's Series D Preferred Stock at the an Exercise Price equal to $2.17 per
share.  The number and purchase price of such shares are subject to adjustment
as provided in Section 8 hereof.

2.   TERM OF THE WARRANT AGREEMENT.

     Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the date of execution hereof and shall be exercisable for a period of (i) seven
(7) years after the date of execution hereof, or (ii) three (3) years from the
effective date of the Company's initial public offering (the "IPO") whichever is
longer.

     Notwithstanding the term of this Warrant Agreement fixed pursuant to
Section 2 hereof, the right to purchase Preferred Stock as granted herein shall
expire, if not previously exercised

                                       1.



<PAGE>
 
immediately upon the closing of a merger or consolidation of the Company with or
into another corporation when the Company is not the surviving corporation, or
the sale of all or substantially all of the Company's properties and assets or
outstanding stock to any other person (the "Merger"), provided in which
Warrantholder realizes a value for its shares equal to or greater than $6.40 per
share.

     Notwithstanding anything to the contrary in this Warrant Agreement, the
rights to purchase the Company's Preferred Stock shall not expire until the
Company complies with such notice provisions.  Such notice shall also contain
such details of the proposed Merger as are reasonable in the circumstances.  If
such closing does not take place, the Company shall promptly notify the
Warrantholder that such proposed transaction has been terminated, and the
Warrantholder may rescind any exercise of its purchase rights promptly after
such notice of termination of the proposed transaction.  In the event of such
rescission, the Warrants will continue to be exercisable on the same terms and
conditions contained herein.

3.   EXERCISE OF THE PURCHASE RIGHTS.

     The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the "Notice of Exercise"), duly completed and executed.  Upon
receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, the Company shall issue to the
Warrantholder a certificate for the number of shares of Preferred Stock
purchased and shall execute the Notice of Exercise indicating the number of
shares which remain subject to future purchases, if any.

     Notwithstanding anything to the contrary contained in Section 2 above or
this Section 3, the Warrantholder shall either (i) exercise all outstanding
warrants by paying to the Company, by cash or check, an amount equal to the
aggregate Warrant Price of the shares being purchased, or (ii) receive shares
equal to the value (as determined below) of this Warrant by surrender of the
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to the Warrantholder a number of
shares of Preferred computed using the following formula:

        X = Y(A-B)
            ------
               A

Where:  X = The number of shares of Preferred to be issued to the Warrantholder.

        Y = The number of shares of Preferred under this Warrant.

        A = The fair market value of one share of Common.

        B = The Exercise Price.

     As used herein, current fair market value of Common Stock shall mean with
respect to each share of Common Stock the average of the closing prices of the
Company's Common Stock sold on all securities exchanges on which the Common
Stock may at the time be listed, or, if

                                       2.



<PAGE>
 
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day the Common Stock is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 p.m.,
New York City time, or, if on any day the Common Stock is not quoted in the
NASDAQ System, the average of the highest bid and lowest asked price on such day
in the domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization, in each such case
averaged over a period of 21 days consisting of the day as of which the current
fair market value of Common Stock is being determined and the 20 consecutive
business days prior to such day. If at any time the Common Stock is not listed
on any securities exchange or quoted in the NASDAQ System or the over-the-
counter market, the current fair market value of Preferred Stock shall be the
highest price per share which the Company could obtain from a willing buyer (not
a current employee or director) for shares of Preferred Stock sold by the
Company, from authorized but unissued shares, as determined in good faith by the
Board of Directors of the Company, unless (i) the Company shall become subject
to a merger, acquisition or other consolidation pursuant to which the Company is
not the surviving party, in which case the current fair market value of the
Stock shall be deemed to be the value received by the holders of the Company's
Stock for each share of Stock pursuant to the Company's acquisition; or (ii) the
Warrantholder shall purchase such shares in conjunction with the initial
underwritten public offering of the Company's Common Stock pursuant to a
registration statement filed under the Securities Act of 1933, in which case,
the fair market value of the shares of stock subject to this Warrant shall be
the price at which all registered shares are sold to the public in such
offering.

4.   RESERVATION OF SHARES.

     (a) Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.

     (b) Registration or Listing. If any shares of Preferred Stock required to
be reserved for purposes of exercise of the Warrant Agreement hereunder require
registration with or approval of any governmental authority under any Federal or
State law (other than any registration under the Securities Act of 1933, as then
in effect, or any similar Federal statute then enforced, or any state securities
law, required by reason of any transfer involved in such conversion), or listing
on any domestic securities exchange, before such shares may be issued upon
conversion, the Company will, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered, listed or
approved for listing on such domestic securities exchange, as the case may be.

5.   NO FRACTIONAL SHARES OR SCRIP.

     No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrantholder's rights to purchase Preferred
Stock, but in lieu of such fractional shares the Company shall make a cash
payment therefor upon the basis of the Exercise Price then in effect.

                                       3.



<PAGE>
 
6.   NO RIGHTS AS SHAREHOLDERS.

     This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrantholder's rights to purchase Preferred Stock as provided for herein.

7.   WARRANTHOLDER REGISTRY.

     The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.

8.   ADJUSTMENT RIGHTS.

     The purchase price per share, the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment from time to time, as follows:

     (a) Merger and Sale of Assets.  If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person, (other than a Merger) then, as a part of such reorganization, merger,
consolidation or sale, lawful provision shall be made so that the Warrantholder
shall thereafter be entitled to receive upon exercise of its rights to purchase
Preferred Stock, the number of shares of Preferred Stock or other securities of
the successor corporation resulting from such merger or consolidation, to which
a holder of the Preferred Stock deliverable upon exercise of the right to
purchase Preferred Stock hereunder would have been entitled in such capital
reorganization, merger, consolidation or sale if the right to purchase such
Preferred Stock hereunder had been exercised immediately prior to such capital
reorganization, merger, consolidation or sale.  In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant Agreement
with respect to the rights and interest of the Warrantholder after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Warrant Agreement (including adjustments of the Exercise Price and number
of shares of Preferred Stock purchasable pursuant to the terms and conditions of
this Warrant Agreement) shall be applicable after that event, as near as
reasonably may be, in relation to any shares deliverable after that event upon
the exercise of the Warrantholder's rights to purchase Preferred Stock pursuant
to this Warrant Agreement.

     (b) Reclassification of Shares.  If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.

                                       4.



<PAGE>
 
     (c) Subdivision or Combination of Shares.  If the Company at any time shall
combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

     (d) Right to Purchase Additional Stock.  If, for any reason, the total
Warrantholder's cost of equipment leased pursuant to the Leases should exceed
$200,000.00, Warrantholder shall have the right to purchase from the Company, at
the Exercise Price per share specified in Section 1 (which price may be subject
to adjustment from time to time as provided for in this Section 8), an
additional number of shares of Series C Preferred Stock, which number shall be
determined by (i) multiplying the amount by which the Warrantholder's total
equipment cost exceeds $200,000.00 by 10% and (ii) dividing the product thereof
by the Exercise Price per share referenced above.

     (e) Notice of Adjustments. In the event that: (i) the Company shall declare
any dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any capital
reorganization, reclassification, consolidation, merger or sale of all or
substantially all of the Company's assets; or (iv) there shall be any voluntary
or involuntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder:

         (i)    At least 20 days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining rights to vote in
respect of such capital reorganization, reclassification, consolidation, merger
or sale of all or substantially all of the Company's assets, dissolution,
liquidation or winding up; and

         (ii)   In the case of any such capital reorganization, reclassification
consolidation, merger or sale of all or substantially all of the Company's
assets, dissolution, liquidation or winding up, at least 20 days' prior written
notice of the date when the same shall take place (and specifying the date on
which the holders of Preferred Stock shall be entitled to exchange their
Preferred Stock for securities or other property deliverable upon such capital
reorganization, reclassification, consolidation, merger or sale of all or
substantially all of the Company's assets, dissolution, liquidation or winding
up).

     Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.

     (f) Registration and Listing. The Company will take all such actions as may
be necessary to assure that all shares of Preferred Stock issuable pursuant to
this Warrant Agreement may be so issued without violation of any applicable law
or regulation or any requirements of any domestic stock exchange (except for
official notice of issuance, which will

                                       5.



<PAGE>
 
be immediately transmitted by the Company upon issuance) upon which shares of
Preferred Stock or other shares of the same class may be listed. The Company
will not take any action which will result in any adjustment of the number of
shares of Preferred Stock issuable upon exercise of this Warrant Agreement if
the total number of shares of Preferred Stock issuable after such action upon
exercise of the Warrant Agreement then outstanding, together with the total
number of shares of Preferred Stock then outstanding, would exceed the total
number of shares of Preferred Stock then authorized and not reserved for any
purpose other than the purpose of issue upon exercise of the Warrant Agreement.

9.   REPRESENTATIONS. WARRANTIES AND COVENANTS OF THE COMPANY.

     (a) Reservation of Preferred Stock.  The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or Federal securities laws.  The
Company has made available to the Warrantholder true, correct and complete
copies of its Articles of Incorporation.  The issuance of certificates for
shares of Preferred Stock upon exercise of the Warrant Agreement shall be made
without charge to the Warrantholder for any issuance tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Preferred Stock; provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved and the issuance and delivery of any certificate in a name other than
that of the Warrantholder.  The Company will not close its books against the
transfer of the Warrant Agreement or of any share of Preferred Stock issued or
issuable upon exercise of the Warrant and any agreement in any manner which
interferes with the timely exercise of the Warrant.

     (b) Due Authority. The execution and delivery by the Company of the Leases,
and this Warrant Agreement and the performance of all obligations of the Company
thereunder and hereunder, including the issuance to Warrantholder of the right
to acquire the shares of Preferred Stock set forth in Section 1 above (which
number of shares may be from time to time adjusted pursuant to the terms of
Section 8 above) have been duly authorized by all necessary corporate action on
the part of the Company, and the Leases and this Warrant Agreement are not
inconsistent with the Company's Certificate of Incorporation or By-Laws, do not
contravene any law or governmental rule, regulation or order applicable to it,
do not and will not contravene any provision of, or constitute a default under,
any indenture, mortgage, contract or other instrument to which it is a party or
by which it is bound, and the Leases and the Warrant Agreement constitute legal,
valid, and binding agreements of the Company, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency and other
laws affecting creditor rights and to general principles of equity.

     (c) Consents and Approvals. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the Securities Exchange Act of 1933, as

                                       6.



<PAGE>
 
amended, (the "1933 Act") and Section 25102(f) of the California Corporate
Securities Law, which filings will be effective by the time required thereby.

     (d) Litigation.  There are no actions, suits, audits, investigations or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company in any court or before any governmental commission, board
or authority which, if adversely determined, will have a material adverse effect
on the ability of the Company to perform its obligations under the Leases and
this Warrant Agreement.

     (e) Subsidiaries or Affiliates. The Company has no subsidiaries or
affiliated companies and does not otherwise own or control, directly or
indirectly, any other corporation, association or business entity.

     (f) Issued Securities.  All issued and outstanding shares of Common Stock,
Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable.  All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all Federal and state securities laws.  In addition:

         (i)    The authorized capital of the Company consists of (A) 15,000,000
shares of Common Stock, of which 627,400 shares are issued and outstanding, and
(B) 5,000,000 shares of preferred stock, of which 300,000 shares are designated
Series A Preferred Stock and 300,000 are designated Series B Preferred Stock,
and 1,000,000 are designated Series C Preferred Stock. 240,000 shares of Series
A Preferred Stock are issued and outstanding and are convertible into 240,000
shares of Common Stock. 160,333 shares of Series B Preferred Stock are issued
and outstanding and are convertible into 160,333 shares of Common Stock. 850,000
shares of Series C Preferred Stock are issued and outstanding and are
convertible into 850,000 shares of Common Stock.

         (ii)   There are 460,000 shares of Common Stock authorized for issuance
pursuant to the Company's Incentive Stock Plan of which 218,000 shares have been
issued

         (iii)  There are no other options, warrants, conversion privileges or
other options or other rights presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of the Company's capital stock or
other securities of the Company.

         (iv)   In accordance with the Company's Restated Articles of
Incorporation, no shareholder of the Company has preemptive rights to purchase
new issuances of the Company's capital stock.

     (g) Financial Statements. The Company has delivered to the Warrantholder
its unaudited Consolidated Balance Sheet and Consolidated Statement of Income
for the period ending August 31, 1993 (the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated. The condition
and operating results of the Company as of the dates and during the periods
indicated therein are true and correct in all material aspects, subject as to
the Consolidated Finance Sheet and Consolidated Statement of income for the
period then ending August 31, 1993 to normal

                                       7.



<PAGE>
 
year-end audit adjustments. Since August 31, 1993 there has been no change in
the assets, liabilities, financial condition or operations of the Company from
that reflected in the Financial Statements other than changes in the ordinary
course of business which have not been, individually or in the aggregate,
materially adverse.

     The Company shall deliver to the Warrantholder (i) within one hundred
twenty (120) days after the end of the Company's fiscal year, statements of
income for such fiscal year, a consolidated balance sheet of the Company as of
the end of such year and consolidated statement of the sources and application
of funds for such year, which year-end financial reports shall be in reasonable
detail and certified by independent public accountants of nationally recognized
standing selected by the Company, and (ii) within forty-five (45) days after the
end of each fiscal quarter other than the last fiscal quarter, unaudited
consolidated statements of income and sources and application of funds for such
quarter and a consolidated balance sheet as of the end of such quarter.

     (h) Contingent and Absolute Liabilities.  The Company has no material
liabilities or obligations, absolute or contingent except the liabilities and
obligations of the Company as set forth in the Financial Statements and
liabilities and obligations which have occurred in the ordinary course of
business, and which have not been materially adverse.

     (i) Licenses, Patents and Copyrights. To the best of the Company's
knowledge, the Company owns, possesses, has access to, or can become licensed on
reasonable terms under, all patents, patent applications, trademarks, trade
names, inventions, franchises, licenses, permits, computer software and
copyrights necessary for the operation of its business as now conducted, with no
known infringement of, or conflict with, the rights of others.

     (j) Employee Contracts. To the best of the Company's knowledge, no employee
of the Company is in violation of any material term of any employment contract,
patent disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any prior employer because
of the nature of the business conducted by the Company.

     (k) Insurance. The Company has in full force and effect insurance policies,
with extended coverage, insuring the Company and its property and business
against such losses and risks, and in such amounts, as are customary for
corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.

     (l) Other Commitments to Register Securities.  Except as set forth in this
Warrant Agreement, the Company is not, pursuant to the terms of any other
agreement currently in existence, under any obligation to register under the
1933 Act, any of its presently outstanding securities or any of its securities
which may hereafter be issued other than the shares of the outstanding Preferred
Stock of the Company.

     (m) Exempt Transaction.  Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of the Warrantholder's right to purchase such Preferred Stock will
constitute transactions exempt from

                                       8.



<PAGE>
 
(i) the registration requirements of Section 5 of the 1933 Act, in reliance upon
Section 4(2) thereof, and (ii) the qualification requirements of the California
Corporate Securities Law, in reliance upon Section 25102(f) thereof.

     (n) Compliance with Rule 144.  At the written request of the Warrantholder,
who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission under the 1933 Act, the Company shall furnish to the Warrantholder,
within ten days after receipt of such request, a written statement confirming
the Company's compliance with the filing requirements of the Securities and
Exchange Commission as set forth in such Rule, than applicable to the Company,
as such Rule may be amended from time to time.

     (o) Brokers' Fees. The Company has not incurred, and will not incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Warrant Agreement or
any other transaction contemplated thereby.

     (p) Untrue, Misleading Statements.  No representation or warranty of the
Company contained in the Leases, and this Warrant Agreement or any certificate
or exhibit furnished or to be furnished to Warrantholder pursuant thereto or in
connection with the transactions contemplated thereby (when read together)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.

10.  REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

     This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder, which by
its execution hereof the Warrantholder hereby confirms:

     (a) Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.

     (b) Private Issue. The Warrantholder understands (i) that the Preferred
Stock issuable upon exercise of the Warrantholder's rights contained herein is
not registered under the 1933 Act or qualified under applicable state securities
laws on the ground that the issuance contemplated by this Warrant Agreement will
be exempt from the registration and qualifications requirements thereof, and
(ii) that the Company's reliance on such exemption is predicated on the
representations set forth in this Section 10.

     (c) Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the

                                       9.



<PAGE>
 
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions or transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.

     (d) Financial Risk.  The Warrantholder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.

     (e) Risk of No Registration.  The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1933 Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the " 1934 Act"), or if a registration
statement covering the securities under the 1933 Act is not in effect when it
desires to sell (i) the rights to purchase Preferred Stock pursuant to this
Warrant Agreement, or (ii) the Preferred Stock issuable upon exercise of the
right to purchase, it may be required to hold such securities for an indefinite
period.  The Warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be made
by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.

11.  TRANSFERS.

     Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, that in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3) transfers.  The transfer shall be recorded on the
books of the Company upon receipt by the Company of a notice of transfer in the
form attached hereto as Exhibit 11 (the "Transfer Notice"), at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer.

                                      10.



<PAGE>
 
12.  MISCELLANEOUS.

     (a) Effective Date.  The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof.  This Warrant Agreement shall
be binding upon any successors or assigns of the Company.

     (b) Attorneys' Fees.  In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.

     (c) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
California.

     (d) Counterparts.  This Warrant 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.

     (e) Titles and Subtitles. The titles of the paragraphs and subparagraphs of
this Warrant Agreement are for convenience and are not to be considered in
construing this Agreement.

     (f) Notices.  Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail, by registered or certified mail, addressed
(i) to the Warrantholder at 61___ North River Road, Rosemont, Illinois 60018,
attention: James Labe, President, Venture Leasing Division, cc: Legal
Department, and (ii) to the Company at 4640 Campbell Drive, Menlo Park,
California 94025 or at such other address as any such party may subsequently
designate by written notice to the other party.

     (g) Specific Performance.  The Company recognizes and agrees that the
Warrantholder will not have an adequate remedy if the Company fails to comply
with this Agreement and that damages will not be readily ascertainable, and the
Company expressly agrees that, in the event of such failure, it shall not oppose
an application by the Warrantholder or any other person entitled to the benefit
of this Agreement requiring specific performance of any or all provisions hereof
or enjoining the Company from continuing to commit any such breach of this
Agreement.

     (h) Survival.  The representations, warranties, covenants and conditions of
the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.

     (i) Severability.  In the event any one or more of the provisions of this
Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable

                                      11.



<PAGE>
 
provision shall be replaced by a mutually acceptable valid, legal and
enforceable provision, which comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provision.

     (j) Amendments. Any provision of this Warrant Agreement may be amended by a
written instrument signed by the Company and by the Warrantholder.

     (k) Additional Documents.  The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (f) and subparagraphs (1), (m) and (o) of Section 9
above and shall also supply such other documents as the Warrantholder may from
time to time reasonably request.

     In Witness Whereof, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized.

                                      Company:

                                      OmniCell Technologies Inc.

Dated: October 22, 1993               By: /s/ William H. Younger, Jr.
      --------------------------         --------------------------------

                                      Title:    Acting CFO
                                            -----------------------------

                                      Warrantholder:

                                      COMDISCO, Inc.

                                      By:________________________________

                                      Title:    President
                                            -----------------------------

                                      12.



<PAGE>
 
                                   Exhibit I
                              NOTICE OF EXERCISE

To:___________________________

(1)  The undersigned Warrantholder hereby elects to purchase ________ shares of
     the Preferred Stock of OMNICELL TECHNOLOGIES, INC., pursuant to the terms
     of the Warrant Agreement dated the 1st day of September 1993 (the "Warrant
     Agreement") between OMNICELL TECHNOLOGIES, INC., and the Warrantholder, and
     tenders herewith payment of the purchase price for such shares in full,
     together with all applicable transfer taxes, if any.

(2)  In exercising its rights to purchase the Preferred Stock of OMNICELL
     TECHNOLOGIES, INC., the undersigned hereby confirms and acknowledges the
     investment representations and warranties made in Section 10 of the Warrant
     Agreement.

(3)  Please issue a certificate or certificates representing said shares of
     Preferred Stock in the name of the undersigned or in such other name as is
     specified below.

 
                                       _____________________________________
                                                      (Name)

 
                                       _____________________________________
                                                     (Address)

                                       Warrantholder: COMDISCO, INC.

                                       By:__________________________________

                                       Title:_______________________________

                                       Date:________________________________

                                      1.



<PAGE>
 
                          ACKNOWLEDGEMENT OF EXERCISE

     The undersigned ____________________, hereby acknowledge receipt of the
"Notice of Exercise" from COMDISCO, INC., to purchase ___________ shares of the
Preferred Stock of OMNICELL TECHNOLOGIES, INC., pursuant to the terms of the
Warrant Agreement, and further acknowledges that _______ shares remain subject
to purchase under the terms of the Warrant Agreement.

                                      Company:

                                      By:_____________________________

                                      Title:__________________________

                                      Date:___________________________

                                      1.



<PAGE>
 
                                  Exhibit II
                                TRANSFER NOTICE

     (To transfer or assign the foregoing Warrant Agreement execute this form
     and supply required information. Do not use this form to purchase shares.)

     For Value Received, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to _______________________
                                                             (Please Print)

whose address is _______________________________________________________________

________________________________________________________________________________

                                         Dated:_________________________________

                                         Holder's Signature:____________________

                                         Holder's Address:______________________

                                         _______________________________________

                                         Signature Guaranteed:__________________

     NOTE:  The signature to this Transfer Notice must correspond with the name
            as it appears on the face of the Warrant Agreement, without
            alteration or enlargement or any change whatever. Officers of
            corporations and those acting in a fiduciary or other representative
            capacity should file proper evidence of authority to assign the
            foregoing Warrant Agreement.

                                      1.





<PAGE>

                                                                     EXHIBIT 4.4

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
     THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
     ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
     OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY
     TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
     ACT OF 1933.

                               WARRANT AGREEMENT

             To Purchase Shares of the Series F Preferred Stock of

                          OmniCell Technologies, Inc.

                         Dated as of January 23, 1995

     WHEREAS, OmniCell Technologies, Inc., a California corporation (the
"Company") has entered into a Master Lease Agreement dated as of September 30,
1993, Equipment Schedule No. VL-2, and related Summary Equipment Schedules (the
"Leases") with COMDISCO, INC., a Delaware corporation (the "Warrantholder"); and

     WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Series F Preferred Stock;

     NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder certify and agree as follows:

1.   GRANT OF THE RIGHT
 TO PURCHASE PREFERRED STOCK.
     -----------------------------------------------

     For value received, the Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase, from the Company 8,130
fully paid and non-assessable shares of the Company's Series F Preferred Stock
("Preferred Stock").  The exercise price ("Exercise Price") shall be equal to
$6.15 per share. The number and purchase price of such shares are subject to
adjustment as provided in Section 8 hereof.

2.   TERM OF THE WARRANT AGREEMENT.
     ------------------------------

     Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the date of execution hereof and shall be exercisable for a period of (i) seven
(7) years after the date of execution hereof, or (ii) three (3) years from the
effective date of the Company's initial public offering (the "IPO") whichever is
longer.

     Notwithstanding the term of this Warrant Agreement fixed pursuant to
Section 2 hereof, the right to purchase Preferred Stock as granted herein shall
expire, if not previously exercised

                                      1.



<PAGE>
 
immediately upon the closing of a merger or consolidation of the Company with or
into another corporation when the Company is not the surviving corporation, or
the sale of all or substantially all of the Company's properties and assets or
outstanding stock to any other person (the "Merger"), provided in which
Warrantholder realizes a value, for its shares equal to or greater than $6.40
per share.

     The Company shall notify the Warrantholder if the Merger is proposed in
accordance with the terms of Subsection 8(g) hereof, and if the Company fails to
deliver such notice, then notwithstanding anything to the contrary in this
Warrant Agreement, the rights to purchase the Company's Preferred Stock shall
not expire until the Company complies with such notice provisions.  Such notice
shall also contain such details of the proposed Merger as are reasonable in
circumstances. If such closing does not take place, the Company shall promptly
notify the Warrantholder that such proposed transaction has been terminated, and
the Warrantholder may rescind any exercise of its purchase rights promptly after
such notice of termination of the proposed transaction. In the event of such
rescission, the Warrants will continue to be exercisable on the same terms and
conditions contained herein.

3.   EXERCISE OF THE PURCHASE RIGHTS.
     -------------------------------

     The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the "Notice of Exercise"), duly completed and executed. Upon
receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, the Company shall issue to the
Warrantholder a certificate for the number of shares of Preferred Stock
purchased and shall execute the Notice of Exercise indicating the number of
shares which remain subject to future purchases, if any.

     Notwithstanding anything to the contrary contained in Section 2 above or
this Section 3, the Warrantholder shall either (i) exercise all outstanding
warrants by paying to the Company, by cash or check, an amount equal to the
aggregate Warrant Price of the shares being purchased, or (ii) receive shares
equal to the value (as determined below) of this Warrant by surrender of the
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to the Warrantholder a number of
shares of Preferred computed using the following formula:

            X = Y(A-B)
                ------
                  A

Where:      X = The number of shares of Preferred to be issued to the
                Warrantholder.

            Y = The number of shares of Preferred under this Warrant.

            A = The fair market value of one share of Common.

            B = The Exercise Price.

                                      2.



<PAGE>
 
     As used herein, current fair market value of Common Stock shall mean with
respect to each share of Common Stock the average of the closing prices of the
Company's Common Stock sold on all securities exchanges on which the Common
Stock may at the time be listed, or, if there have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if on any day the Common Stock is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ System as of 4:00 p.m., New York City time, or, if on any day the
Common Stock is not quoted in the NASDAQ System, the average of the highest bid
and lowest asked price on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 21 days
consisting of the day as of which the current fair market value of Common Stock
is being determined and the 20 consecutive business days prior to such day. If
at any time the Common Stock is not listed on any securities exchange or quoted
in the NASDAQ System or the over-the-counter market, the current fair market
value of Preferred Stock shall be the highest price per share which the Company
could obtain from a willing buyer (not a current employee or director) for
shares of Preferred Stock sold by the Company, from authorized but unissued
shares, as determined in good faith by the Board of Directors of the Company,
unless (i) the Company shall become subject to a merger, acquisition or other
consolidation pursuant to which the Company is not the surviving party, in which
case the current fair market value of the Stock shall be deemed to be the value
received by the holders of the Company's Stock for each share of Stock pursuant
to the Company's acquisition; or (ii) the Warrantholder shall purchase such
shares in conjunction with the initial underwritten public offering of the
Company's Common Stock pursuant to a registration statement filed under the
Securities Act of 1933, in which case, the fair market value of the shares of
stock subject to this Warrant shall be the price at which all registered shares
are sold to the public in such offering.

4.   RESERVATION OF SHARES.
     ---------------------

     (a) Authorization and Reservation of Shares. During the term of this
         ---------------------------------------
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.

     (b) Registration or Listing. If any shares of Preferred Stock required to
         -----------------------
be reserved for purposes of exercise of the Warrant Agreement hereunder require
registration with or approval of any governmental authority under any Federal or
State law (other than any registration under the Securities Act of 1933, as then
in effect, or any similar Federal statute then enforced, or any state securities
law, required by reason of any transfer involved in such conversion), or listing
on any domestic securities exchange, before such shares may be issued upon
conversion, the Company will, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered, listed or
approved for listing on such domestic securities exchange, as the case may be.

5.   NO FRACTIONAL SHARES OR SCRIP.
     -----------------------------

     No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrantholder's rights to purchase Preferred
Stock, but in lieu of such fractional

                                      3.



<PAGE>
 
shares the Company shall make a cash payment therefor upon the basis of the
Exercise Price then in effect.

6.   NO RIGHTS AS SHAREHOLDERS.
     -------------------------

     This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrantholder's rights to purchase Preferred Stock as provided for herein.

7.   WARRANTHOLDER REGISTRY.
     ----------------------

     The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.

8.   ADJUSTMENT RIGHTS.
     -----------------

     The purchase price per share, the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment from time to time, as follows:

     (a) Merger and Sale of Assets. If at any time there shall be a capital
         -------------------------
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person, (other than a Merger) then, as a part of such reorganization, merger,
consolidation or sale, lawful provision shall be made so that the Warrantholder
shall thereafter be entitled to receive upon exercise of its rights to purchase
Preferred Stock, the number of shares of Preferred Stock or other securities of
the successor corporation resulting from such merger or consolidation, to which
a holder of the Preferred Stock deliverable upon exercise of the right to
purchase Preferred Stock hereunder would have been entitled in such capital
reorganization, merger, consolidation or sale if the right to purchase such
Preferred Stock hereunder had been exercised immediately prior to such capital
reorganization, merger, consolidation or sale. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant Agreement
with respect to the rights and interest of the Warrantholder after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Warrant Agreement (including adjustments of the Exercise Price and number
of shares of Preferred Stock purchasable pursuant to the terms and conditions of
this Warrant Agreement) shall be applicable after that event, as near as
reasonably may be, in relation to any shares deliverable after that event upon
the exercise of the Warrantholder's rights to purchase Preferred Stock pursuant
to this Warrant Agreement.

     (b) Reclassification of Shares. If the Company at any time shall, by
         --------------------------
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights

                                      4.



<PAGE>
 
under this Warrant Agreement immediately prior to such combination,
reclassification, exchange, subdivision or other change.

     (c) Subdivision or Combination of Shares. If the Company at any time shall
         ------------------------------------
combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

     (d) Right to Purchase Additional Stock. If, for any reason, the total
         ----------------------------------
Warrantholder's cost of equipment leased pursuant to the Leases should exceed
$500,000.00, Warrantholder shall have the right to purchase from the Company, at
the Exercise Price per share specified in Section 1 (which price may be subject
to adjustment from time to time as provided for in this Section 8), an
additional number of shares of Series F Preferred Stock, which number shall be
determined by (i) multiplying the amount by which the Warrantholder's total
equipment cost exceeds $500,000.00 by 10%, and (ii) dividing the product thereof
by the Exercise Price per share referenced above.

     (e) Notice of Adiustments. In the event that: (i) the Company shall declare
         ---------------------
any dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any capital
reorganization, reclassification, consolidation, merger or sale of all or
substantially all of the Company's assets; or (iv) there shall be any voluntary
or involuntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder:

         (i)  At least 20 days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining rights to vote in
respect of such capital reorganization, reclassification, consolidation, merger
or sale of all or substantially all of the Company's assets, dissolution,
liquidation or winding up; and

         (ii) In the case, upon any such capital reorganization,
     reclassification, consolidation, merger or sale of all or substantially all
     of the Company's assets, dissolution, liquidation or winding up, at least
     20 days' prior written notice of the date when the same shall take place
     (and specifying the date on which the holders of Preferred Stock shall be
     entitled to exchange their Preferred Stock for securities or other property
     deliverable upon such capital reorganization, reclassification,
     consolidation, merger or sale of all or substantially all of the Company's
     assets, dissolution, liquidation or winding up).

     Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.

                                      5.



<PAGE>
 
     (f) Registration and Listing. The Company will take all such actions as may
         ------------------------
be necessary to assure that all shares of Preferred Stock issuable pursuant to
this Warrant Agreement may be so issued without violation of any applicable law
or regulation or any requirements of any domestic stock exchange (except for
official notice of issuance, which will be immediately transmitted by the
Company upon issuance) upon which shares of Preferred Stock or other shares of
the same class may be listed. The Company will not take any action which will
result in any adjustment of the number of shares of Preferred Stock issuable
upon exercise of this Warrant Agreement if the total number of shares of
Preferred Stock issuable after such action upon exercise of the Warrant
Agreement then outstanding, together with the total number of shares of
Preferred Stock then outstanding, would exceed the total number of shares of
Preferred Stock then authorized and not reserved for any purpose other than the
purpose of issue upon exercise of the Warrant Agreement.

9.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
     --------------------------------------------------------

     (a) Reservation of Preferred Stock. The Preferred Stock issuable upon
         ------------------------------
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or Federal securities laws. The
Company has made available to the Warrantholder true, correct and complete
copies of its Articles of Incorporation. The issuance of certificates for shares
of Preferred Stock upon exercise of the Warrant Agreement shall be-made without
charge to the Warrantholder for any issuance tax in respect thereof, or other
cost incurred by the Company in connection with such exercise and the related
issuance of shares of Preferred Stock; provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
and the issuance and delivery of any certificate in a name other than that of
the Warrantholder. The Company will not close its books against the transfer of
the Warrant Agreement or of any share of Preferred Stock issued or issuable upon
exercise of the Warrant and any agreement in any manner which interferes with
the timely exercise of the Warrant.

     (b) Due Authority. The execution and delivery by the Company of the Leases,
         -------------
and this Warrant Agreement and the performance of all obligations of the Company
thereunder and hereunder, including the issuance to Warrantholder of the right
to acquire the shares of Preferred Stock set forth in Section 1 above (which
number of shares may be from time to time adjusted pursuant to the terms of
Section 8 above) have been duly authorized by all necessary corporate action on
the part of the Company, and the Leases and this Warrant Agreement are not
inconsistent with the Company's Certificate of Incorporation or By-Laws, do not
contravene any law or governmental rule, regulation or order applicable to it,
do not and will not contravene any provision of, or constitute a default under,
any indenture, mortgage, contract or other instrument to which it is a party or
by which it is bound, and the Leases and this Warrant Agreement constitute
legal, valid and binding agreements of the Company, enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency and
other laws affecting creditor rights and to general principles of equity.

                                      6.



<PAGE>
 
     (c) Consents and Approvals. No consent or approval of, giving of notice to,
         ----------------------
registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the Securities Exchange Act of 1933, as amended, (the "1933 Act") and
Section 25102(f) of the California Corporate Securities Law, which filings will
be effective by the time required thereby.

     (d) Litigation. There are no actions, suits, audits, investigations or
         ----------
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company in any court or before any governmental commission, board
or authority which, if adversely determined, will have a material adverse effect
on the ability of the Company to perform its obligations under the Leases and
this Warrant Agreement.

     (e) Subsidiaries or Affiliates. The Company has no subsidiaries or
         --------------------------
affiliated companies and does not otherwise own or control, directly or
indirectly, any other corporation, association or business entity.

     (f) Issued Securities. All issued and outstanding shares of Common Stock,
         -----------------
Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all Federal and state securities laws. In addition:

         (i)   The authorized capital of the Company consists of (a) 20,000,000
     shares of Common Stock, of which 1,592,924 shares are issued and
     outstanding, and (b) 7,000,000 shares of Preferred Stock of which 240,000
     are designated Series A Preferred Stock, 160,333 are designated Series B
     Preferred Stock, 850,000 are designated Series C Preferred Stock, 664,000
     are designated Series D Preferred Stock, 983,000 are designated Series E
     Preferred Stock and 2,000,000 are designated Series F Preferred Stock.
     240,000 shares of Series A Preferred Stock are issued and outstanding and
     convertible into 480,000 shares of Common Stock, 160,333 shares of Series B
     Preferred Stock are issued and outstanding and convertible into 320,666
     shares of Common Stock. 850,000 shares of Series C Preferred Stock are
     issued and outstanding and convertible into 1,700,000 shares of Common
     Stock. 654,742 shares of Series D Preferred are issued and outstanding and
     convertible into 1,309,484 shares of Common Stock. 982,631 shares of Series
     E Preferred Stock are issued and outstanding and convertible into 1,965,262
     shares of Common Stock. 1,948,090 shares of Series F Preferred Stock are
     issued and outstanding and convertible into 1,948,090 shares of Common
     Stock.

         (ii)  There are 2,610,000 shares of Common Stock authorized for
     issuance pursuant to the Company's Incentive Stock Plan of which 1,929,410
     shares have been issued.

         (iii) The Company has issued Comdiso, Inc. warrants exercisable for up
     to 9,217 shares of Series D Preferred Stock.

                                      7.



<PAGE>
 
         (iv) The Company is planning to increase the authorized number of
     shares of Series F Preferred Stock by 1,000,0000 shares to a new total of
     3,000,000 shares.

     In addition, the Company is planning to split the outstanding shares of
     Series A Series B, Series C, Series D, and Series E Preferred Stock on a
     two-for-one basis in order to match the prior two-for-one split the Common
     Stock with a corresponding adjustment in the liquidation preference,
     dividend rate, and conversion rate of such shares. Because such shares are
     each presently convertible into two shares of Common Stock such action will
     not affect the capitalization of the Company or the rights of such
     shareholders.

         (v)  There are no other options, warrants, conversion privileges or
     other options or other rights presently outstanding to purchase or
     otherwise acquire any authorized but unissued shares of the Company's
     capital stock or other securities of the Company.

         (vi) In accordance with the Company's Restated Articles of
     Incorporation, no shareholder of the Company has preemptive rights to
     purchase new issuances of the Company's capital stock.

     (g) Financial Statements. The Company has delivered to the Warrantholder
         --------------------
its unaudited Consolidated Balance Sheet and Consolidated Statement of Income
for the period ending November 30, 1994 (the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated. The condition
and operating results of the Company as of the dates and during the periods
indicated therein are true and correct in all material aspects, subject as to
the Consolidated Balance Sheet and Consolidated Statement of Income for the
period then ending November 30, 1994 to normal year-end audit adjustments. Since
November 30, 1994 there has been no change in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Financial
Statements other than changes in the ordinary course of business which have not
been, individually or in the aggregate, materially adverse.

     The Company shall deliver to the Warrantholder (i) within one hundred
twenty (120) days after the end of the Company's fiscal year, statements of
income for such fiscal year, a consolidated balance sheet of the Company as of
the end of such year and consolidated statement of the sources and application
of funds for such year, which year-end financial reports shall be in reasonable
detail and certified by independent public accountants of nationally recognized
standing selected by the Company, and (ii) within forty-five (45) days after the
end of each fiscal quarter other than the last fiscal quarter, unaudited
consolidated statements of income and sources and application of funds for such
quarter and a consolidated balance sheet as of the end of such quarter.

     (h) Contingent and Absolute Liabilities. The Company has no material
         -----------------------------------
liabilities or obligations, absolute or contingent except the liabilities and
obligations of the Company as set forth-in the Financial Statements and
liabilities and obligations which have occurred in the ordinary course of
business, and which have not been materially adverse.

                                      8.



<PAGE>
 
     (i) Licenses, Patents and Copyrights. To the best of the Company's
         --------------------------------
knowledge, the Company owns, possesses, has access to, or can become licensed on
reasonable terms under, all patents, patent applications, trademarks, trade
names, inventions, franchises, licenses, permits, computer software and
copyrights necessary for the operation of its business as now conducted, with no
known infringement of, or conflict with, the rights of others.

     (j) Employee Contracts. To the best of the Company's knowledge, no employee
         ------------------
of the Company is in violation of any material term of any employment contract,
patent disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any prior employer because
of the nature of the business conducted by the Company.

     (k) Insurance. The Company has in full force and effect insurance policies,
         ---------
with extended coverage, insuring the Company and its property and business
against such losses and risks, and in such amounts, as are customary
corporations engaged in a similar business and similarly [_____] and as
otherwise may be required pursuant to the terms of any other contract or
agreement.

     (l) Other Commitments to Register Securities. Except as set forth in this
         ----------------------------------------
Warrant Agreement, the Company is not, pursuant to the terms of any other
agreement currently in existence, under any obligation to register under the
1933 Act, any of its presently outstanding securities or any of its securities
which may hereafter be issued other than the shares of the outstanding Preferred
Stock of the Company.

     (m) Exempt Transaction. Subject to the accuracy of the Warrantholder's
         ------------------
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of the Warrantholder's right to purchase such Preferred Stock will
constitute transactions exempt from (i) the registration requirements of Section
5 of the 1933 Act, in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the California Corporate Securities Law, in
reliance upon Section 25102(f) thereof.

     (n) Compliance with Rule 144. At the written request of the Warrantholder,
         ------------------------
who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission under the 1933 Act, the Company shall furnish to the Warrantholder,
within ten days after receipt of such request, a written statement confirming
the Company's compliance with the filing requirements of the Securities and
Exchange Commission as set forth in such Rule, than applicable to the Company,
as such Rule may be amended from time to time.

     (o) Brokers' Fees. The Company has not incurred, and will not incur,
         -------------
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Warrant Agreement or
any other transaction contemplated thereby.

     (p) Untrue, Misleading Statements. No representation or warranty of the
         -----------------------------
Company contained in the Leases, and this Warrant Agreement or any certificate
or exhibit furnished or to be furnished to Warrantholder pursuant thereto or in
connection with the transactions

                                      9.



<PAGE>
 
contemplated thereby (when read together) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading.

10.  REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
     --------------------------------------------------

     This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder, which by
its execution hereof the Warrantholder hereby confirms:

     (a) Investment Purpose. The right to acquire Preferred Stock or the
         ------------------
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursu