Ariel Corp – ‘S-4’ on 5/25/01

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Registration of Securities Issued in a Business-Combination Transaction   —   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4         Registration of Securities Issued in a               347   1.79M 
                          Business-Combination Transaction                       
 4: EX-10.10    Form of Promissory Note, Dated March 28, 2001          6     30K 
 5: EX-10.11    Form of Security Agreement                            12     44K 
 6: EX-10.12    Intellectual Property Security Agreement              10     23K 
 2: EX-10.5     Lease Extension for Cranbury Premises                  7     27K 
 3: EX-10.6     Employment Agreement of Dennis Schneider              24     87K 
 7: EX-21.1     Subsidiaries of Ariel Corporation                      1      6K 
 8: EX-23.1     Consent of Pricewaterhousecoopers LLP                  1      6K 
 9: EX-23.3     Consent of Deloitte & Touche LLP                       1      6K 
10: EX-99.1     Consent of Needham & Company, Inc.                     1      7K 
11: EX-99.2     Consent of Robertson Stephens, Inc.                    1      7K 

S-4   —   Registration of Securities Issued in a Business-Combination Transaction
Document Table of Contents

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As filed with the Securities and Exchange Commission on May 25, 2001  
                                               Registration No. 333-

------------------------------------------------------------------------------- 
------------------------------------------------------------------------------- 

SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

---------------   

FORM S-4  
REGISTRATION STATEMENT  
Under the Securities Act of 1933  

---------------   

ARIEL CORPORATION 
(Exact Name of Registrant as Specified in its Charter)  

                                                                [Download Table]
                                                                              
        Delaware                      3571                    13-3137699      
(State of Incorporation)  (Primary Standard Industrial     (I.R.S. Employer   
                              Classification Code)      Identification Number)

2540 Route 130  
Cranbury, New Jersey 08512  
(609) 860-2900  
(Address, Including Zip Code, and Telephone Number, 
Including Area Code, of Registrant's Principal Executive Offices) 

---------------   

Mr. Dennis Schneider  
Chief Executive Officer 
Ariel Corporation 
2540 Route 130  
Cranbury, New Jersey 08512  
(609) 860-2900  
(Name, Address, Including Zip Code, and Telephone Number, 
Including Area Code, of Agent for Service)  

---------------   

Copies to:  

                                                                [Download Table]
                                                                    
  Harold W. Paul, Esq.               David A. Makarechian, Esq.     
    Paul & Rosen LLP                   Anna R. Rothbart, Esq.       
  420 Lexington Avenue            Brobeck, Phleger & Harrison LLP   
New York, New York 10017       Two Embarcadero Place, 2200 Geng Road
     (212) 661-2727                 Palo Alto, California 94303     
                                           (650) 424-0160           

---------------   

Approximate date of commencement of proposed sale to the public: At the     
effective time of the merger of MAYAN Networks Corporation with and into the    
Registrant, which shall occur as soon as practicable after the effective date   
of this Registration Statement and the satisfaction or waiver of all            
conditions to the closing of such merger.                                       

If the securities being registered on this Form are being offered in        
connection with the formation of a holding company and there is compliance      
with General Instruction G, 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(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. [_]                                                      

---------------   

CALCULATION OF REGISTRATION FEE 

                                                        [Enlarge/Download Table]
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------------------------------------------------------------------------------------------------------

                                                                             Proposed                 
                                                              Proposed       Maximum                  
                                                              Maximum       Aggregate      Amount of  
           Title of Each Class               Amount to be  Offering Price    Offering     Registration
      of Securities to be Registered         Registered(1)   Per Share       Price(2)         Fee     
------------------------------------------------------------------------------------------------------
                                                                                                      
Common Stock, par value $.001 per share..    168,305,346        N/A       $37,748,458.50   $9,437.12  
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------

(1) Calculated based on the exchange ratio as of May 15, 2001 times 50,331,278  
fully diluted shares of MAYAN capital stock.                            
(2) Estimated solely for purposes of calculating the registration fee required  
by Section 6(b) of the Securities Act and calculated pursuant to Rule   
457(f)(2) under the Securities Act. Pursuant to Rule 457(f)(2) under the
Securities Act, the proposed maximum aggregate offering price of the    
Registrant's common stock was calculated based on the book value of the 
MAYAN securities to be acquired in the merger.                          

---------------   

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 such Section       
8(a), may determine.                                                            

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[ARIEL CORPORATION LETTERHEAD]

                                                                          , 2001

Dear Ariel Corporation Stockholder:                                             

I am writing you today about our proposed merger with MAYAN Networks      
Corporation. As a result of the merger, MAYAN will merge with and into Ariel    
and shareholders of MAYAN will become stockholders of Ariel. If we complete the 
merger as proposed, each share of MAYAN common stock will be exchanged for      
shares of Ariel common stock. We will issue approximately           shares in   
the merger to MAYAN shareholders, option holders and warrant holders. We will   
determine the number of shares of Ariel common stock for which each share of    
MAYAN common stock will be exchanged immediately prior to the completion of the 
merger in accordance with formulas specified in the merger agreement and        
described in the attached materials. Ariel common stock is traded on the Nasdaq 
National Market under the symbol "ADSP." The closing price for Ariel common     
stock reported on the Nasdaq National Market on        , 2001, was $     per    
share.                                                                          

You will be asked to approve the merger agreement by and between Ariel and
MAYAN at a special meeting of Ariel stockholders to be held on        , 2001    
beginning at       a.m., local time, at          . For the merger to go         
forward, the holders of a majority of the outstanding shares of Ariel common    
stock entitled to vote at the special meeting must approve the merger           
agreement. The terms of the merger agreement provide that if the merger is      
approved and effected, Ariel's name will automatically be changed to "MAYAN     
Networks Corporation." By voting to approve the merger agreement, you are       
voting to approve this change in Ariel's name along with all other transactions 
or actions contemplated by the merger agreement. At the special meeting, you    
will also be asked to consider and vote upon three additional proposals. The    
first additional proposal is to amend Ariel's certificate of incorporation, to  
be effective immediately prior to the effective time of the merger, to:         

. increase the number of authorized shares of Ariel's common stock from     
  shares to         shares, after giving effect to the one for
 reverse stock split, expected to occur immediately prior to the effective
time of the merger; and                                                 

. effect a reverse split of the common stock of Ariel in which each         
outstanding shares of Ariel common stock will be combined into one share
of Ariel common stock.                                                  

The second additional proposal is to approve the implementation of the 2001     
Stock Incentive Plan under which         shares of Ariel common stock will      
initially be reserved for issuance. The third additional proposal is to elect   
Ariel's current board of directors. The affirmative vote of the holders of a    
majority of the shares of Ariel common stock outstanding and entitled to vote   
at the special meeting is required for the approval of the proposal to amend    
the certificate of incorporation. The holders of a majority of the shares       
represented in person or by proxy at the meeting must approve the 2001 Stock    
Incentive Plan and a plurality of the votes cast in person or by proxy by       
holders of shares of Ariel common stock is required to elect directors.         

We are very excited by the opportunities we envision for the combined     
company. The disinterested members of your board of directors have determined   
that the merger and all transactions contemplated by the merger agreement,      
including the change of Ariel's name to "MAYAN Networks Corporation" and the    
issuance of Ariel common stock in connection with the merger, are in the best   
interests of Ariel and its stockholders, and unanimously recommend that you     
approve the merger agreement. Your board of directors has obtained an opinion   
from Needham & Company, Inc., to the effect that, at the date of the opinion    
and based upon and subject to the qualifications, assumptions and limitations   
in the opinion, the exchange ratio set forth in the merger agreement is fair to 
Ariel from a financial point of view. Holders of Ariel common stock are urged   
to, and should read the opinion in its entirety. The disinterested members of   
your board of directors have also determined that the proposals to amend        
Ariel's certificate of incorporation, approve the implementation of the 2001    
Stock Incentive Plan and elect Ariel's current board of directors are also in   
the best interest of Ariel and its stockholders, and unanimously recommend that 
you approve these proposals.                                                    

You should carefully consider the discussion in the section entitled "Risk
Factors" beginning on page 18 of the joint proxy statement/prospectus.          

      Sincerely,

            Dennis Schneider
                                  President, Chief Executive Officer and
      Director

Neither the Securities and Exchange Commission nor any state securities         
commission has approved or disapproved of this transaction or the securities of 
Ariel to be issued in the merger, or determined if this joint proxy             
statement/prospectus is accurate or complete. Any representation to the         
contrary is a criminal offense.                                                 

This joint proxy statement/prospectus is dated           , 2001, and was  
first mailed to Ariel stockholders on or about                   , 2001.        

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ARIEL CORPORATION 
2540 Route 130
Cranbury, New Jersey 08512
(609) 860-2900

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
To be held on             , 2001

We will hold a special meeting of stockholders of Ariel Corporation       
beginning at      a.m., local time, on                 , 2001 at                
                                             for the following
purposes:                                                                       

1. To consider and vote upon a proposal to approve the Agreement and  
Plan of Merger, dated as of March 28, 2001, by and between Ariel            
Corporation and MAYAN Networks Corporation, under which MAYAN will merge    
with and into Ariel with Ariel surviving the closing and Ariel will change  
its name to MAYAN Networks Corporation;                                     

 2. To consider and vote upon a proposal to amend Ariel's certificate of
incorporation to:                                                           

. increase the number of authorized shares of common stock from     
        shares to       shares, after giving effect to the one for
  reverse stock split which is expected to occur immediately
prior to the effective time of the merger; and                  

. effect a reverse split of the common stock of Ariel, to be        
effective immediately prior to the effective time of the merger,
  in which each     outstanding shares of Ariel common stock will be
combined into one share of Ariel common stock;                  

  3. To consider and vote upon a proposal to approve the implementation of
the 2001 Stock Incentive Plan under which         shares of Ariel common    
stock will initially be reserved for issuance;                              

4. To consider and vote upon a proposal to elect Ariel's current board
of directors; and                                                           

5. To transact such other business as may properly come before the    
special meeting or any adjournment or postponement thereof.                 

 We describe the merger, merger agreement, the proposed amendment to Ariel's
certificate of incorporation and the proposed 2001 Stock Incentive Plan more    
fully in this joint proxy statement/prospectus, which we urge you to read       
carefully in its entirety.                                                      

  Only Ariel stockholders of record at the close of business on              ,
2001 are entitled to notice of and to vote at the special meeting or any        
adjournment or postponement of the special meeting.                             

Your vote is important. To assure that your shares are represented at the 
special meeting, you are urged to complete, date and sign the enclosed proxy    
and mail it promptly in the postage-paid envelope provided, or call the toll-   
free telephone number or use the Internet by following the instructions         
included with your proxy card, whether or not you plan to attend the special    
meeting in person. You may revoke your proxy in the manner described in the     
accompanying joint proxy statement/prospectus at any time before it has been    
voted at the special meeting. You may vote in person at the special meeting     
even if you have returned a proxy.                                              

                                      By Order of the Board of Directors

                                         _____________________________________
             Secretary

Cranbury, New Jersey                                                            
, 2001                                                              

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[MAYAN LETTERHEAD]

                                                                          , 2001

Dear MAYAN Networks Corporation Shareholder:                                    

 I am writing you today about our proposed merger with Ariel Corporation. As
a result of the merger, MAYAN will merge with and into Ariel and you will       
become stockholders of Ariel. If we complete the merger as proposed, Ariel will 
issue approximately 168,305,346 shares in the merger to MAYAN shareholders,     
option holders and warrant holders or        shares after giving effect to the  
one for     reverse stock split of      shares of Ariel common stock, which     
will occur immediately prior to the effective time of the merger. The number of 
shares of Ariel common stock to be issued in the merger may be increased to the 
extent Ariel's third party transaction expenses exceed specified thresholds. We 
will determine the number of shares of Ariel common stock for which each share  
of MAYAN common stock will be exchanged immediately prior to the completion of  
the merger in accordance with formulas specified in the merger agreement and    
described in this joint proxy statement/prospectus. Ariel common stock is       
traded on the Nasdaq National Market under the symbol "ADSP." The closing price 
for Ariel common stock reported on the Nasdaq National Market on         ,      
2001, was $     per share.                                                      

 You will be asked to vote upon the merger agreement at a special meeting of
MAYAN shareholders to be held on                , 2001 beginning at       a.m., 
local time, at                       . For the merger to be approved, the       
holders of a majority of the outstanding shares of MAYAN common stock and the   
holders of a majority of the outstanding shares of MAYAN preferred stock must   
approve the merger agreement. Only shareholders who hold shares of MAYAN common 
stock and preferred stock at the close of business on               , 2001 will 
be entitled to vote at the special meeting.                                     

In addition, holders of MAYAN preferred stock are also being asked to     
convert their stock into MAYAN common stock pursuant to Article III, Section    
B(4)(b)(ii) of MAYAN's Amended and Restated Articles of Incorporation, which    
would result in the waiver of liquidation preferences in the merger and to      
terminate the Amended and Restated Investors' Rights Agreement dated as of      
November 1, 1999, the Amended and Restated Right of First Refusal and Co-Sale   
Agreement dated as of October 21, 1999 and the Amended and Restated Voting      
Agreement dated as of October 21, 1999, immediately prior to the closing of the 
Merger.                                                                         

We are very excited by the opportunities we envision for the combined     
company. The disinterested members of your board of directors have determined   
that the terms and conditions of the merger are advisable and in the best       
interests of MAYAN and you, and unanimously recommend that you approve the      
merger agreement and the merger, and if you are a holder of MAYAN preferred     
stock, that you convert your preferred stock into common stock as required in   
the merger agreement. Your board of directors obtained an opinion from          
Robertson Stephens, Inc., to the effect that, as of the date of such opinion    
and based upon and subject to the qualifications and limitations in the         
opinion, the shares of Ariel common stock to be received by the MAYAN           
Shareholders in exchange for each outstanding share of MAYAN common stock are   
fair to MAYAN's shareholders from a financial point of view.                    

You should carefully consider the discussion in the section entitled "Risk
Factors" beginning on page 18 of the joint proxy statement/prospectus.          

              Sincerely,

                 John Tingleff
                           Chief Financial Officer

Neither the Securities and Exchange Commission nor any state securities         
commission has approved or disapproved of this transaction or the securities of 
Ariel to be issued in the merger, or determined if this joint proxy             
statement/prospectus is accurate or complete. Any representation to the         
contrary is a criminal offense.                                                 

This joint proxy statement/prospectus is dated           , 2001, and was  
first mailed to MAYAN shareholders on or about                   , 2001.        

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MAYAN NETWORKS CORPORATION
2115 O'Nel Drive
San Jose, California 95131
(408) 392-9900

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 
To be held on             , 2001

----------------  

  We will hold a special meeting of shareholders of MAYAN Networks Corporation
at       a.m., local time, on                 , 2001 at                         
                                             for the following
purposes:                                                                       

1. For the holders of MAYAN common stock, voting as a class, and the  
holders of MAYAN preferred stock, voting separately as a class, to consider 
and vote upon a proposal to approve and adopt the Agreement and Plan of     
Merger, dated as of March 28, 2001, by and between Ariel Corporation and    
MAYAN Networks Corporation, under which MAYAN will merge with and into      
Ariel, and each outstanding share of MAYAN common stock will be converted   
into the right to receive shares of Ariel common stock; and                 

  2. For the holders of MAYAN preferred stock, voting separately by series
of preferred stock, to cause the voluntary conversion of the preferred      
stock held by them into the common stock of MAYAN immediately prior to the  
effective time of the merger pursuant to Article III, Section B(4)(b)(ii)   
of MAYAN's Amended and Restated Articles of Incorporation.                  

The disinterested members of your board of directors have determined that 
the merger is advisable and in the best interests of MAYAN and its              
shareholders, and unanimously recommend that you vote to adopt the merger       
agreement and approve the merger, and to approve the voluntary conversion of    
MAYAN's preferred stock into MAYAN common stock immediately prior to the        
merger.                                                                         

 We describe the merger more fully in this joint proxy statement/prospectus,
which we urge you to read carefully in its entirety.                            

  Only MAYAN shareholders of record at the close of business on              ,
2001 are entitled to notice of and to vote at the special meeting or any        
adjournment or postponement of the special meeting.                             

Your vote is important. To assure that your shares are represented at the 
special meeting, you are urged to complete, date and sign the enclosed proxy    
and mail it promptly in the postage-paid envelope provided, or call the toll-   
free number or use the Internet by following the instructions enclosed with     
your proxy, whether or not you plan to attend the special meeting in person.    
You may revoke your proxy in the manner described in the accompanying joint     
proxy statement/prospectus at any time before it has been voted at the special  
meeting. You may vote in person at the special meeting even if you have         
returned a proxy.                                                               

                                      By Order of the Board of Directors

                                         _____________________________________
             Secretary

San Jose, California                                                            
, 2001                                                            

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                          Page
                                                                          ----
                                                                              
QUESTIONS AND ANSWERS ABOUT THE MERGER...................................   1 

SUMMARY..................................................................   3 

ARIEL SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA....................  12 

MAYAN SELECTED HISTORICAL FINANCIAL DATA.................................  14 

SUMMARY UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION.....  16 

RISK FACTORS.............................................................  18 
Risks Related to the Merger..............................................  18 
Risks Related to MAYAN...................................................  24 
Risks Related to MAYAN's Industry........................................  36 
Risks Related to Ariel...................................................  38 
Risks Relating to Ariel's Industry.......................................  44 
Risks Related to the Exchange Offer......................................  45 

ARIEL SPECIAL MEETING....................................................  47 
General..................................................................  47 
Date, Time and Place.....................................................  47 
Matters to be Considered at the Special Meeting..........................  47 
Record Date..............................................................  47 
Voting of Proxies........................................................  47 
Votes Required...........................................................  48 
Quorum; Abstentions and Broker Non-Votes.................................  48 
Solicitation of Proxies and Expenses.....................................  48 
Board Recommendations....................................................  49 

MAYAN SPECIAL MEETING....................................................  50 
General..................................................................  50 
Date, Time and Place.....................................................  50 
Matters to be Considered at the Special Meeting..........................  50 
Record Date..............................................................  50 
Voting of Proxies........................................................  50 
Votes Required...........................................................  51 
Quorum and Abstentions...................................................  51 
Solicitation of Proxies and Expenses.....................................  52 
Board Recommendations....................................................  52 

THE MERGER...............................................................  53 
Background of the Merger.................................................  53 
Recommendation of the Ariel Board of Directors and Ariel's Reasons for        
 the Merger..............................................................  56 
Opinion of Ariel's Financial Advisor.....................................  59 
Recommendation of the MAYAN Board of Directors and MAYAN's Reasons for        
 the Merger..............................................................  63 
Opinion of MAYAN's Financial Advisor.....................................  66 
Interests of MAYAN's Management in the Merger and Potential Conflicts of      
 Interest................................................................  72 
Interests of Ariel's Management in the Merger and Potential Conflicts of      
 Interest................................................................  73 
The Merger...............................................................  73 
Closing..................................................................  74 
Ariel Name Change........................................................  74 
Conversion of MAYAN Stock in the Merger..................................  74 
MAYAN Stock Options and Warrants.........................................  75 

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TABLE OF CONTENTS--(Continued)

                                                                [Download Table]
                                                                              
MAYAN Convertible Subordinated Promissory Notes and Exchange Offer........  75
The Exchange Agent........................................................  76
Exchange of MAYAN Stock Certificates for Ariel Stock Certificates.........  76
Transfer of Ownership; Distributions with Respect to Unexchanged Shares...  76
Representations and Warranties............................................  77
Ariel's and MAYAN's Conduct of Business Before Completion of the Merger...  78
No Solicitation of Transactions...........................................  79
Conditions to Completing the Merger.......................................  81
Extension, Waiver and Amendment of the Merger Agreement...................  83
Termination of the Merger Agreement.......................................  83
Payment of Fees and Expenses..............................................  84
Material Federal Income Tax Considerations................................  84
Accounting Treatment......................................................  85
Stockholders' Dissenters' Rights of Appraisal.............................  85
Director and Officer Indemnification and Insurance........................  85
Voting Agreements.........................................................  86
Market Stand-Off Agreements...............................................  86
Bridge Loan...............................................................  86
Ariel Rights Plan.........................................................  87
2001 Stock Incentive Plan.................................................  87
Listing of Ariel Common Stock to be Issued in the Merger and Common Stock     
 of Combined Company......................................................  87
Restrictions on Sale of Shares By Affiliates of Ariel and MAYAN...........  87
Management Following the Merger...........................................  88
Operations Following the Merger...........................................  88

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION..............  89

DESCRIPTION OF CAPITAL STOCK AND COMPARISON OF STOCKHOLDER RIGHTS.........  98
Description of Ariel Capital Stock........................................  98
Description Of MAYAN Capital Stock........................................  99
Comparison of Rights of Ariel Stockholders and MAYAN Shareholders......... 101

OTHER ARIEL PROPOSALS..................................................... 105
Proposal to Approve the Amendment to Ariel's Restated Certificate of          
 Incorporation............................................................ 105
Proposal to Approve the Implementation of Ariel's 2001 Stock Incentive        
 Plan..................................................................... 106
Proposal to Elect Ariel's Current Board of Directors...................... 116

MARKET PRICE INFORMATION.................................................. 117
Ariel Market Price Data................................................... 117
MAYAN Market Price Data................................................... 117
Recent Closing Prices..................................................... 117

INFORMATION ABOUT ARIEL................................................... 118
Ariel's Corporate History................................................. 118
Industry Overview......................................................... 119
Ariel's Approach.......................................................... 120
Products.................................................................. 121
Research and Development.................................................. 122
Manufacturing and Quality Control......................................... 123
Sales and Marketing....................................................... 123
Technical Support......................................................... 124
Customers................................................................. 124
Competition............................................................... 124

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                                                                [Download Table]
                                                                               
Intellectual Property and Other Proprietary Rights........................  125
Backlog...................................................................  125
Employees.................................................................  126
Properties................................................................  126
Legal Proceedings.........................................................  126
Directors and Executive Officers..........................................  126
Committees of Ariel's Board of Directors..................................  128
Compensation Committee Interlocks and Insider Participation...............  128
Executive Compensation....................................................  129
Compensation Committee Report On Executive Compensation...................  129
Directors' Compensation...................................................  131
Option Grants During the Year Ended December 31, 2000.....................  131
Option Exercises During the Year Ended December 31, 2000 and Aggregate         
 Fiscal Year-End Option Value.............................................  132
Employment Agreements.....................................................  132
The 1992 Stock Option and Restricted Stock Plan...........................  134
The 1994 Stock Option Plan................................................  134
1995 Stock Option Plan....................................................  135
Non-Plan Options..........................................................  136
1996 Directors Plan.......................................................  136
Report on Repricing of Stock Options......................................  136
Security Ownership of Certain Beneficial Owners and Management............  137
Certain Relationships and Related Transactions............................  138
Sales Consulting Services.................................................  138

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF     
 OPERATIONS OF ARIEL......................................................  139
Overview..................................................................  139
Results of Operations.....................................................  140
Liquidity and Capital Resources...........................................  145
Qualitative and Quantitative Disclosures About Market Risk................  147
Recent Pronouncements.....................................................  148

INFORMATION ABOUT MAYAN...................................................  149
Industry Background.......................................................  149
MAYAN's Solutions.........................................................  151
MAYAN's Strategy..........................................................  152
Products..................................................................  153
Customers.................................................................  153
Sales and Marketing.......................................................  153
Customer Technical Services and Support...................................  154
Competition...............................................................  154
Research and Development..................................................  155
Patents and Intellectual Property.........................................  155
Manufacturing.............................................................  155
Employees.................................................................  156
Facilities................................................................  156
Legal Proceedings.........................................................  156
Executive Officers and Directors..........................................  157
Board Committees..........................................................  159
Compensation of Directors.................................................  159

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                                                                [Download Table]
                                                                               
Compensation Committee Interlocks and Insider Participation...............  160
Executive Compensation....................................................  160
Option Grants in Last Fiscal Year.........................................  160
Option Exercises in Last Fiscal Year......................................  162
Benefit Plans.............................................................  162
Employment Contracts, Termination of Employment Arrangements and Change in     
 Control Arrangements.....................................................  163
Limitation of Liability and Indemnification...............................  163

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS OF MAYAN...................  165

PRINCIPAL SHAREHOLDERS OF MAYAN...........................................  168

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF     
 OPERATIONS OF MAYAN......................................................  171
Overview..................................................................  171
Results of Operations.....................................................  172
Liquidity and Capital Resources...........................................  173
Qualitative and Quantitative Disclosure about Market Risk.................  174
Recent Accounting Pronouncements..........................................  175

EXPERTS...................................................................  175

LEGAL MATTERS.............................................................  175

WHERE YOU CAN FIND MORE INFORMATION.......................................  176

INDEX TO FINANCIAL STATEMENTS.............................................  F-1

                                                        [Enlarge/Download Table]
                                                                                                      
APPENDICES                                                                                            
APPENDIX I    --  Agreement and Plan of Merger                                                        
APPENDIX II   --  Form of Ariel Voting Agreement                                                      
APPENDIX III  --  Form of MAYAN Voting Agreement                                                      
APPENDIX IV   --  Form of Employment Agreement                                                        
APPENDIX V    --  Form of Market Standoff Agreement                                                   
APPENDIX VI   --  Form of 2001 Stock Incentive Plan                                                   
APPENDIX VII  --  Opinion of Needham & Company, Inc., financial advisor to Ariel Corporation          
APPENDIX VIII --  Opinion of Robertson Stephens, Inc., financial advisor to MAYAN Networks Corporation
APPENDIX IX   --  Form of Ariel Proxy Card                                                            
APPENDIX X    --  Form of MAYAN Proxy Card                                                            

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QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: What will MAYAN shareholders receive in the merger?                          

A: If the merger is completed, Ariel will issue approximately           shares  
  of its common stock (after giving effect to a one for    reverse stock split
of the Ariel common stock) in the merger to MAYAN shareholders, option    
 holders and warrant holders. The number of shares of Ariel common stock for
which each share of MAYAN common stock will be exchanged is approximately 
  . The exact number will be determined immediately prior to the
  completion of the merger in accordance with formulas specified in the merger
agreement and described in this document. MAYAN shareholders will not     
  receive fractional shares of Ariel common stock. Instead, MAYAN shareholders
will receive cash, without interest, for any fractional share of Ariel    
common stock you might otherwise have been entitled to receive.           

Q: When do you expect to complete the merger?                                   

A: We are working to complete the merger in the third calendar quarter of 2001. 
Because the merger is subject to various conditions, however, we cannot   
predict the exact timing.                                                 

Q: When will the reverse split of the Ariel common stock occur?                 

A: We expect the reverse stock split to occur immediately prior to the          
effective time of the merger.                                             

Q: When will Ariel's name change to MAYAN Networks Corporation occur?           

A: We expect Ariel's name will be changed to MAYAN Networks Corporation upon    
completion of the merger.                                                 

Q: Should MAYAN shareholders send in their stock certificates now?              

A: No. After we complete the merger, Ariel will send instructions to MAYAN      
shareholders explaining how to exchange their shares of MAYAN common stock
for the appropriate number of shares of Ariel common stock.               

Q: Should Ariel stockholders send in their stock certificates?                  

A: No. Although Ariel stockholders will continue to own their shares of Ariel   
  common stock after the merger, the reverse split will cause each certificate
  to represent one-[ ] of the number of shares represented on the certificate.
Ariel will send instructions to Ariel shareholders explaining how to      
exchange their certificates for new certificates.                         

Q: How do I vote?                                                               

A: Mail your signed proxy card in the enclosed return envelope or grant your    
proxy by telephone or the Internet as soon as possible so that your shares
  may be represented at the special stockholders meetings. You may also attend
  the meeting in person instead of submitting a proxy. If your shares are held
in "street name" by your broker, your broker will vote your shares only if
you provide instructions on how to vote. You should follow the directions 
provided by your broker regarding how to instruct your broker to vote your
shares.                                                                   

Q: Can I change my vote after mailing my proxy?                                 

A: Yes. You may change your vote by delivering a signed notice of revocation or 
a later-dated, signed proxy card to the corporate secretary of Ariel or   
MAYAN, as applicable, before the applicable stockholder meeting, or by    
attending the stockholder meeting and voting in person.                   

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Q: Who can I call with questions?                                               

A: If you are a Ariel stockholder with questions about the merger, please call  
Ariel Investor Relations at (609) 860-2900.                               

If you are a MAYAN shareholder with questions about the merger, please call 
MAYAN Investor Relations at (408) 392-9900.                                 

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SUMMARY 

 The following summary highlights selected information from this joint proxy
statement/prospectus and may not contain all of the information that is         
important to you. You should carefully read this entire document, including the 
appendices, and the other documents we refer you to for a more complete         
understanding of the merger. References in this document to "Ariel" mean Ariel  
Corporation, a Delaware corporation, and its subsidiaries and affiliates.       
References in this document to "MAYAN" or "MAYAN Networks" mean MAYAN Networks  
Corporation, a California corporation and its affiliates.                       

 The information contained herein concerning or attributed to MAYAN has been
supplied by MAYAN, and the information contained herein concerning or           
attributed to Ariel has been supplied by Ariel. Although neither MAYAN nor      
Ariel has any knowledge that would indicate that any statements contained       
herein based on the information provided by the other are untrue, neither       
MAYAN, on the one hand, nor Ariel, on the other hand, take any responsibility   
for the accuracy or completeness of any information provided by the other or    
for any failure by the other to disclose events that may have occurred and may  
affect the significance or accuracy of such information but which are unknown   
to MAYAN or Ariel, respectively.                                                

The Companies                                                                   

ARIEL CORPORATION                                                               
2540 Route 130                                                                  
Cranbury, New Jersey 08512                                                      
www.Ariel.com                                                                   
(609) 860-2900                                                                  

  Ariel is a provider of open systems-based digital remote access equipment to
Internet Service Providers, ISPs. Ariel's remote access equipment is compatible 
with open systems platforms running a variety of popular operating systems,     
including Windows NT and Linux, and enables ISPs to build reliable, scalable    
and easy to manage networks at a cost that is significantly below other         
available alternatives. Ariel's common stock is traded on the Nasdaq National   
Market under the symbol "ADSP." Ariel's web site is not part of or incorporated 
by reference in this document.                                                  

MAYAN NETWORKS CORPORATION                                                      
2115 O'Nel Drive                                                                
San Jose, California 95131                                                      
www.mayannetworks.com                                                           
(408) 392-9900                                                                  

 MAYAN Networks Corporation designs, develops and markets telecommunications
networking solutions to address the bandwidth constraints, complexity and       
service limitations of metropolitan edge networks. Voice and data traffic from  
businesses and consumers enter and exit the public telecommunications network   
at metro edge networks. MAYAN's objective is to become a leading provider of    
next generation networking solutions, including software, hardware and services 
for the metro edge. MAYAN's web site is not part of or incorporated by          
reference in this document.                                                     

The Merger (See page 53)                                                        

Ariel and MAYAN have entered into a merger agreement that provides for the
merger of MAYAN and Ariel. As a result, shareholders of MAYAN will become       
stockholders of Ariel, and holders of MAYAN common stock, options, warrants and 
other rights to purchase common stock (except for MAYAN's convertible           
promissory notes, discussed below) will own approximately 90% of the issued and 
outstanding equity securities                                                   

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of the combined company. Ariel stockholders, option holders and warrant holders 
will retain control of approximately 10% of the combined company. These         
percentages assume that all outstanding options and warrants will be exercised  
and converted. To the extent that some or all of the options or warrants are    
not exercised and converted, these percentages may be materially different. We  
urge you to read the merger agreement, which is included as Appendix I,         
carefully in its entirety.                                                      

The number of shares of Ariel common stock for which each share of MAYAN  
common stock will be exchanged is approximately      , after giving effect to   
the one for     reverse stock split which is expected to occur immediately      
prior to the effective time of the merger. The exact number will be determined  
immediately prior to the completion of the merger per formulas specified in the 
merger agreement and described under "The Merger--Conversion of MAYAN Stock in  
the Merger." We have assumed that the holders of MAYAN Series A, B, C and D     
preferred stock will voluntarily convert their shares into MAYAN common stock   
pursuant to Article III, Section B(4)(b)(ii) of MAYAN's Amended and Restated    
Articles of Incorporation immediately prior to the effective time of the        
merger. The articles of incorporation of MAYAN provide that the outstanding     
shares of each series of MAYAN preferred stock will automatically convert into  
common stock if holders of at least a majority of that series consent to the    
conversion. It is a condition to the merger that the conversion of preferred    
stock occur immediately prior to the closing of the merger.                     

  In connection with the merger, Ariel is required to amend its certificate of
incorporation to (1) increase the number of authorized shares of Ariel common   
stock and (2) effect a reverse split of the common stock of Ariel, to be        
effective immediately prior to the effective time of the merger, in which each  
  outstanding shares of Ariel common stock will be combined into one share
of Ariel common stock, and Ariel is required to adopt the implementation of the 
2001 Stock Incentive Plan under which       shares of Ariel common stock will   
initially be reserved for issuance. Ariel is seeking approval of its            
stockholders for each of these proposals.                                       

Additionally, Ariel will assume the convertible subordinated promissory   
notes of MAYAN, and these notes will be convertible into Ariel common stock, as 
described under "The Merger--MAYAN Convertible Subordinated Promissory Notes    
and Exchange Offer."                                                            

Stockholder Approvals (See pages 48 and 51)                                     

Ariel Stockholders                                                            

The holders of a majority of the shares of Ariel common stock outstanding 
and entitled to vote at the special meeting of Ariel's stockholders must        
approve the merger agreement, and such approval shall include approval of all   
the actions and transactions contemplated by the merger agreement, including    
the change of Ariel's name to "MAYAN Networks Corporation." In addition, Ariel  
stockholders will be asked at the special meeting to:                           

. approve an amendment to Ariel's certificate of incorporation to:          

. increase the number of authorized shares of Ariel's common stock, and   

. effect a one for    reverse stock split;                                

. approve the implementation of the 2001 Stock Incentive Plan under which   
shares of Ariel common stock will initially be reserved for 
issuance, and                                                           

. elect Ariel's current board of directors to serve until the earlier of    
(i) the closing of the merger or (ii) until their successors are duly   
elected and qualified.                                                  

The holders of a majority of Ariel's outstanding common stock outstanding 
and entitled to vote at the Ariel special meeting must approve the amendment to 
Ariel's certificate of incorporation. The holders of a majority of the shares   
of Ariel's common stock that are present or represented by proxy at the Ariel   
special                                                                         

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meeting must approve the implementation of the 2001 Stock Incentive Plan, and a 
plurality of the votes cast in person or by proxy by holders of shares of Ariel 
common stock is required to elect directors. Ariel stockholders are entitled to 
cast one vote per share of Ariel common stock owned at the close of business on 
, 2001.                                                       

Ariel's directors and officers owning beneficially approximately 12.1% of 
Ariel's common stock outstanding as of March 28, 2001, including options which  
have vested or will vest within 60 days of that date, have agreed to vote all   
of their shares of Ariel common stock for approval of the Ariel proposals. See  
Appendix II. Additionally, Ariel's directors and officers will agree not to     
sell, transfer or otherwise dispose of any Ariel common stock (or other         
securities) held by them for a period of one year following the closing of the  
merger. See Appendix IV.                                                        

MAYAN Shareholders                                                            

 For the merger to be approved, the holders of a majority of the outstanding
shares of MAYAN common stock and the holders of a majority of the outstanding   
shares of MAYAN preferred stock must approve the merger agreement.              
Additionally, the holders of MAYAN preferred stock must voluntarily convert     
their stock into MAYAN common stock pursuant to Article III, Section            
B(4)(b)(ii) of MAYAN's Amended and Restated Articles of Incorporation           
immediately prior to the closing of the merger. MAYAN shareholders are entitled 
to cast one vote per share of MAYAN common stock and MAYAN preferred stock      
owned at the close of business on          , 2001.                              

MAYAN's directors and executive officers owning beneficially approximately
58.97% of MAYAN's common stock and preferred stock outstanding as of March 31,  
2001, including options, have agreed to vote all of their shares of MAYAN       
common stock and preferred stock for approval of the merger agreement. See      
Appendix III. Additionally, MAYAN's directors and executive officers will agree 
not to sell, transfer or otherwise dispose of any Ariel common stock (or other  
securities) to be held by them after the merger for a period of one year        
following the closing of the merger. See Appendix IV.                           

Recommendations of the Boards of Directors (See pages 56 and 63)                

  The MAYAN and Ariel boards of directors have each determined that the merger
is in the best interests of their respective stockholders. The disinterested    
members of the MAYAN board of directors unanimously recommend that MAYAN        
shareholders vote FOR approval of the merger agreement and the conversion of    
MAYAN preferred stock into MAYAN common stock immediately prior to the merger.  
The disinterested members of the Ariel board of directors unanimously recommend 
that Ariel stockholders vote FOR approval of the merger agreement, the          
amendment of Ariel's certificate of incorporation and the approval of the       
implementation of the 2001 Stock Incentive Plan.                                

Opinions of Financial Advisors (See pages 59 and 66)                            

In deciding to approve the merger, each of the MAYAN and Ariel boards of  
directors considered opinions from their respective financial advisors, among   
various other factors described at pages 59 and 66.                             

On March 28, 2001, Needham & Company, Inc., Ariel's financial advisor,    
delivered its written opinion to the Ariel board that, as of that date, the     
exchange ratio was fair from a financial point of view to Ariel. The full text  
of the written opinion of Needham & Company, Inc., which sets forth the         
assumptions made, matters considered and limitations on the review undertaken   
in connection with the opinion, is attached as Appendix VII. You should read    
this opinion carefully in its entirety. Needham & Company, Inc.'s opinion is    
directed to the Ariel board of directors and addresses only the fairness of the 
exchange ratio pursuant to the merger agreement from a financial point of view  
to Ariel as of the date of the opinion, and does not constitute a               
recommendation to any stockholder as to how to vote on any matter relating to   
the merger.                                                                     

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On March 28, 2001, MAYAN's financial advisor, Robertson Stephens, Inc.,   
delivered its oral opinion to the MAYAN board of directors that, as of that     
date, the exchange ratio was fair from a financial point of view to MAYAN's     
shareholders. Robertson Stephens subsequently confirmed its oral opinion by     
delivery of its written opinion dated March 28, 2001. The full text of          
Robertson Stephens' written opinion is attached to this document as Appendix    
VIII. We encourage you to read this opinion carefully in its entirety for a     
description of the procedures followed, assumptions made, matters considered    
and limitations on the review undertaken. Robertson Stephens' opinion is        
directed to the MAYAN board of directors and does not constitute a              
recommendation to any shareholder as to how to vote on any matter relating to   
the merger.                                                                     

Interests of Certain Persons in the Merger (See pages 72 and 73)                

 When considering the recommendation of the MAYAN board, you should be aware
that some directors and officers of MAYAN have the following interests in the   
merger that are different from, or in addition to, yours:                       

. Ariel agreed to cause the combined company in the merger to indemnify     
each present and former MAYAN officer and director against liabilities  
 arising out of service as an officer or director. The combined company in
the merger will maintain officers' and directors' liability insurance to
cover those liabilities for the next six years.                         

. Ariel agreed that Esmond Goei, Chief Executive Officer and a director of  
MAYAN, and John Tingleff, Chief Financial Officer of MAYAN, will join   
Ariel as the Chief Executive Officer and Chief Financial Officer,       
respectively, of Ariel following the merger.                            

. Ariel agreed to use its best efforts to appoint Esmond Goei, Thomas       
Edrington, Steven Krausz, Jim Mongiello and Peter Morris, all members of
the board of directors of MAYAN, to Ariel's board of directors effective
at the effective time of the merger. It is anticipated that the terms of
 service of these new board members will be staggered as follows: Mr. Goei
will have a term expiring after the first year of service, which we     
expect will be in 2002, Messrs. Mongiello and Edringon will have terms  
expiring after their second year of service, which we expect will be in 
2003, and Messrs. Morris and Krausz will have terms expiring after their
third year of service, which we expect will be in 2004.                 

. As of March 31, 2001, the executive officers and directors of MAYAN and   
their affiliates owned 5,620,500 shares of MAYAN common stock and       
 20,036,145 shares of MAYAN preferred stock. Additionally, as of March 31,
2001, the executive officers and directors of MAYAN held options to     
purchase 1,828,170 shares of MAYAN common stock.                        

Additionally, Esmond Goei is currently serving as Vice-Chairman of Ariel's
board of directors and beneficially owns, or has the right to acquire,          
shares of Ariel common stock, after giving effect to the one for     reverse    
stock split, and 1,835,670 shares of MAYAN capital stock. Due to the conflict   
of interest arising from Mr. Goei's dual representation on the boards of        
directors of Ariel and MAYAN, Mr. Goei has abstained from voting on all         
proposals with respect to the merger.                                           

As a result, these directors and officers may be more likely to vote to   
approve the merger and voluntarily convert any shares of MAYAN preferred stock  
they may hold than MAYAN shareholders generally.                                

Interests of Ariel's Management in the Merger                                   

As a condition to completion of the merger, executive officers and key    
employees of Ariel are required to sign employment agreements with the combined 
company, effective only upon completion of the merger, that include             
compensation and proposed options to purchase shares of Ariel common stock.     
Under the employment agreements, the executive officers and key employees agree 
to waive the acceleration benefits under their existing employment or severance 
agreements with Ariel and refrain from competing with the combined              

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company for a period of one year following termination of employment, and will, 
upon termination without cause, receive three to six months of severance pay as 
well as an additional one to two years of vesting of the shares of Ariel common 
stock issuable upon exercise of Ariel stock options, based upon the date of the 
termination.                                                                    

Additionally, Dennis Schneider, President, Chief Executive Officer and    
director of Ariel has agreed to enter into an employment agreement with the     
combined company pursuant to which Mr. Schneider will become the Senior Vice    
President of Marketing of the combined company following the merger. Under Mr.  
Schneider's employment agreement, Mr. Schneider agrees to waive the             
acceleration benefits (with respect to this merger only) under his existing     
employment agreement with Ariel and refrain from competing with the combined    
company for a period of one year following termination of employment.           
Additionally, upon an involuntary termination without cause, Mr. Schneider will 
receive six months of severance pay.                                            

Anthony Agnello, Chairman of the Ariel board of directors, will maintain a
board seat on the board of directors of the combined company. Mr. Agnello       
beneficially owns, or has the right to acquire,        shares of Ariel common   
stock, after giving effect to the one for     reverse stock split which is      
expected to occur immediately prior to the effective time of the merger.        

As a result of these arrangements, the executive officers of Ariel may be 
more likely to approve the merger, the amendment of Ariel's certificate of      
incorporation and the 2001 Stock Incentive Plan than Ariel stockholders         
generally.                                                                      

No Solicitation of Transactions (See page 79)                                   

Subject to limited exceptions, the merger agreement prohibits Ariel from  
soliciting or participating in discussions with third parties about alternative 
transactions that may prevent consummation of the merger. In addition, Ariel is 
obligated to provide MAYAN with information concerning any alternative          
transactions, and five business days' notice before any termination of the      
merger agreement takes effect. The restrictions, however, do not prohibit       
Ariel's board of directors from taking actions necessary to fulfill its         
fiduciary duties to Ariel stockholders under applicable law.                    

Conditions to Completion of the Merger (See page 81)                            

Whether we complete the merger depends on a number of conditions being    
satisfied in addition to Ariel stockholders' approval of the merger agreement   
and MAYAN shareholders' approval of the merger agreement. However, either Ariel 
or MAYAN may choose to complete the merger even though one or more of these     
conditions has not been satisfied, as permitted by applicable law. We cannot be 
certain when, or if, the conditions to the merger will be satisfied or waived,  
or that the merger will be completed. The following conditions, among others,   
must be satisfied or waived before the merger can be completed:                 

. the shares of Ariel common stock to be issued in exchange for MAYAN       
common stock must have been registered with the SEC under the Securities
 Act of 1933 the registration statement must have become effective and the
registration statement must not be the subject of any stop order or     
proceedings seeking a stop order;                                       

. the representations and warranties in the merger agreement must have been 
accurate in all material respects at the date the merger agreement was  
 executed and must be accurate in all material respects at the time of the
closing;                                                                

. we must perform and comply in all material respects with our respective   
covenants in the merger agreement;                                      

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. all consents, approvals and authorizations legally required to consummate 
 the merger must have been obtained from all governmental entities, except
where the absence of the consent, approval or authorization could not   
reasonably be expected to have a material adverse effect;               

. the shares of Ariel common stock to be issued in the merger must be       
authorized for listing on the Nasdaq National Market;                   

. no event, change, condition or effect that is materially adverse to Ariel 
must have occurred;                                                     

. the combined company following the merger must qualify for listing on the 
Nasdaq National Market;                                                 

. the one for    reverse split of Ariel's common stock must be effective;   

. each share of MAYAN preferred stock outstanding immediately prior to the  
merger must have been converted into shares of MAYAN common stock       
pursuant to Article III, Section B(4)(b)(ii) of MAYAN's Amended and     
Restated Articles of Incorporation;                                     

. the Ariel board of directors and the Ariel stockholders must have         
approved the certificate of amendment to Ariel's certificate of         
incorporation and the Ariel reverse stock split, and the certificate of 
amendment to the certificate of incorporation shall have been filed with
the Delaware Secretary of State;                                        

. the Ariel board of directors and the Ariel stockholders must have         
approved the adoption of the 2001 Stock Incentive Plan;                 

. each of the current officers and directors of Ariel must have resigned    
from his or her officer or director position, as the case may be, at    
Ariel, except for Anthony Agnello and Esmond Goei, who shall remain on  
the board of directors of the combined company and Dennis Schneider, who
will be the Senior Vice President of Marketing of the combined company; 

. each holder of Ariel stock options who is entitled to accelerated vesting 
as a result of the merger must have waived the acceleration of vesting  
with respect to his or her options;                                     

. each of Carlos Borgialli, Gene Corrado, David During, Don Elwell, Richard 
Flocco, Nathan Guedalia, Ken Kristiansen, Jack Loprete, Bonne Mullen,   
Aziz Mzili, Arthur Naseef and Johnny Vieira, employees of Ariel, must   
have entered into an employment agreement with the combined company; and

. each of the officers and directors of Ariel and MAYAN must have executed  
 market standoff agreements agreeing to refrain from selling, transferring
 or otherwise disposing of shares of Ariel common stock to be held by them
for a one year period following the merger.                             

Termination of the Merger Agreement (See page 83)                               

Ariel and MAYAN can agree at any time prior to completing the merger to   
terminate the merger agreement. Also, either of us can decide, without the      
other's consent, to terminate the merger agreement if the merger has not been   
completed on or before August 31, 2001, provided the terminating party has not  
caused the merger not to be completed, if the other company has breached the    
merger agreement, if either party receives a superior proposal, or for other    
reasons. Additionally, MAYAN can terminate the merger agreement if Ariel's      
common stock is delisted from the Nasdaq National Market or if the common stock 
of the combined company does not qualify for listing on the Nasdaq National     
Market.                                                                         

Termination Fee and Expenses (See page 84)                                      

Each party has agreed to reimburse the other party for all expenses       
reasonably incurred by that party if the merger agreement is terminated by      
reason of a superior proposal. Otherwise, each party shall bear its own         
expenses in connection with the merger.                                         

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Governmental Approvals and Regulatory Requirements                              

Other than compliance with applicable federal and state securities laws in
connection with the issuance of Ariel common stock pursuant to the merger,      
compliance with applicable provisions of the Delaware General Corporation Law   
and the California General Corporation Law, no federal or state regulatory      
requirements must be complied with and no governmental approval must be         
obtained in connection with the merger.                                         

United States Federal Income Tax Consequences of the Merger (See page 84)       

The merger has been structured so as to qualify as a reorganization within
the meaning of the Internal Revenue Code. If the merger qualifies as a          
reorganization, MAYAN shareholders generally will not recognize gain or loss    
for United States federal income tax purposes in the merger. It is a condition  
to completion of the merger that each of MAYAN and Ariel obtain a legal opinion 
from outside counsel that the merger will constitute a reorganization within    
the meaning of the Internal Revenue Code.                                       

Anticipated Accounting Treatment of the Merger (See page 85)                    

We intend to treat the merger as a purchase for accounting and financial  
reporting purposes, which means that MAYAN will be treated as a separate entity 
for periods prior to the closing. Because MAYAN will own approximately 90% of   
the common stock of Ariel (on a diluted basis) after the merger, the merger     
will be accounted for as a reverse acquisition which results in MAYAN being the 
acquirer of Ariel for accounting purposes.                                      

Restrictions on the Ability to Sell Ariel Stock (See page 87)                   

All shares of Ariel common stock that MAYAN shareholders receive in       
connection with the merger will be freely transferable unless the holder is     
considered an "affiliate" of either Ariel or MAYAN for purposes of the          
Securities Act or the holder executes a market standoff agreement. Shares of    
Ariel common stock held by affiliates may be sold only pursuant to an effective 
registration statement or an exemption from registration under the Securities   
Act and shares of Ariel common stock subject to the market standoff agreements  
may only be sold after the expiration of one year following the closing of the  
merger.                                                                         

Differences in the Rights of Shareholders (See page 101)                        

If the merger is completed, MAYAN shareholders will become stockholders of
Ariel and the rights of the MAYAN shareholders will be governed by Delaware law 
and Ariel's certificate of incorporation and bylaws, rather than California law 
and the MAYAN articles of incorporation and bylaws. The rights of a shareholder 
of MAYAN will differ from the rights of a stockholder of Ariel. To review these 
differences in more detail, see "Description of Capital Stock and Comparison of 
Stockholder Rights--Comparison of Rights of Ariel Stockholders and MAYAN        
Shareholders."                                                                  

Other Ariel Stockholder Proposals (see page 105)                                

Ariel is also presenting proposals to it stockholders to:                   

. approve an amendment to Ariel's certificate of incorporation to           

. increase the number of authorized common shares from        shares to   
      shares, after giving effect to the one for     reverse stock
  split which is expected to occur immediately prior to the effective time
of the merger; and                                                    

. effect a one for    reverse stock split of the common stock of Ariel, to
be effective immediately prior to the effective time of the merger;   

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. approve the implementation of the 2001 Stock Incentive Plan under which   
shares of Ariel common stock will initially be reserved for   
issuance; and                                                           

. elect Ariel's current board of directors to serve until the earlier of    
(i) the closing of the merger or (ii) until their successors are duly   
elected and qualified.                                                  

 Approval of each of the proposals requires the favorable vote of a majority
of the outstanding Ariel shares entitled to vote on the record date.            

The disinterested members of the Ariel board of directors unanimously     
recommend that Ariel stockholders vote to approve the foregoing proposals.      

Exchange Offer relating to Convertible Subordinated Promissory Notes            

On May 22, 2001 MAYAN commenced an offering of up to $50.0 million in     
aggregate principal amount of new 7 7/8% Convertible Subordinated Notes due     
2005, for up to $75.0 million in aggregate principal amount of 5 1/4%           
Convertible Subordinated Notes due 2005, or existing notes, to holders of       
record as of May 21, 2001, which consists of approximately 15 holders who MAYAN 
understands are qualified institutional buyers. The offer will remain open      
until June 21, 2001, unless extended by MAYAN. MAYAN is offering to exchange    
$2,000 in principal amount of exchange notes for each $3,000 in principal       
amount of existing notes. Holders may tender all, some or none of their         
existing notes. The exchange notes will be convertible at any time prior to     
maturity. Before the closing of the merger with Ariel (or alternative mergers), 
the exchange notes will be convertible into shares of MAYAN's common stock at   
an initial conversion price of $5.00 per share of MAYAN common stock, subject   
to adjustments. If the merger with Ariel closes, the outstanding exchange notes 
will, upon such closing, become convertible at any time thereafter into shares  
of Ariel common stock at an initial conversion price per share equal to $1.50   
multiplied by a fraction in inverse proportion to the proportion of the         
reduction in the number of shares of Ariel common stock resulting from the      
reverse stock split in Ariel shares provided for in the merger agreement,       
subject to certain adjustments. If an alternative merger closes, the            
outstanding exchange notes will, upon such closing, become convertible at any   
time thereafter into whatever consideration the converting holders would have   
received in the alternative merger if they had converted their exchange notes   
immediately before the consummation of the alternative merger, subject to       
adjustments. If MAYAN has not, on or before December 31, 2001, closed the       
merger with Ariel (or an alternative transaction), then holders will have the   
right to exercise, at their option, an election under the exchange notes        
indenture to have their exchange notes, effective as of January 31, 2002,       
automatically convert into notes governed by alternative terms provided for     
under the exchange notes indenture that are substantially the same as the terms 
applicable to the existing notes. These alternative terms will provide for      
payment of unpaid interest on the conversion date accrued to such date at 7     
7/8% per year and for interest thereafter to accrue at 5 1/4% per year and will 
also provide for the principal amount of the converted exchange notes to be     
deemed to increase, effective as of the conversion date, to $3,000 per $2,000   
in face amount of converted exchange notes.                                     

  In the event of a (i) change in control of Ariel after the merger with MAYAN
or (ii) a delisting of Ariel's common stock (after the merger with MAYAN), the  
holders of the exchange notes may require Ariel after the merger with MAYAN to  
repurchase the exchange notes at 105% of the principal amount plus accrued and  
unpaid interest. In addition, prior to the earlier of (i) 90 days following the 
effective date of a shelf registration statement covering a resale of the       
exchange notes and common stock into which the exchange notes are convertible   
following the merger with Ariel, (ii) the closing of an alternative merger or   
(iii) January 10, 2002, if at the close of business on December 31, 2001 MAYAN  
has not closed the merger with Ariel, the holders of the exchange notes may     
require the repurchase of the exchange notes at 37.5% of the principal amount   
plus accrued and unpaid interest. This repurchase option could require MAYAN,   
or Ariel after the merger with MAYAN, to make a cash payment of up to           
approximately $18,750,000 to repay the exchange notes and will result in the    
exchange notes being classified as a current liability on MAYAN's balance sheet 
(or Ariel's balance sheet after the merger with MAYAN) until this repurchase    
option expires.                                                                 

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Bridge Loan                                                                     

  At the time of the signing of the merger agreement, MAYAN agreed that for so
long as the merger agreement has not been terminated, MAYAN will advance to     
Ariel, on an as-needed-basis, bridge loans of up to an aggregate of $2,000,000  
for the purpose of financing operating expenses incurred in the ordinary course 
of business. The loans will be advanced on the terms set forth in the form of   
bridge loan attached to the merger agreement. Each advance of all or any        
portion of the bridge loan is subject to the following conditions: (i) the      
representations and warranties of Ariel set forth in the merger agreement must  
be true and correct in all material respects as of the time of that advance,    
(ii) Ariel must not have breached in any material respect any covenant          
contained in the merger agreement, and (iii) Ariel must have given MAYAN at     
least three (3) days' written notice requesting that advance and affirming that 
the conditions described in (i) and (ii) above have been satisfied. As of May   
21, 2001, MAYAN has made four advances to Ariel in the aggregate amount of      
$2,000,000. See "The Merger--Bridge Loan."                                      

Trademarks                                                                      

Ariel(R) is a registered trademark and the Ariel logo is a trademark of   
Ariel Corporation.                                                              

"Any Protocol to any Port," "Everylayer Everywhere," "MAYAN," "MAYAN      
Networks," "Smarter Metro Edge," "Unifier," "Unifier SMT" and "Unifier SMX" are 
trademarks of MAYAN Networks Corporation.                                       

This document contains other trade names, trademarks and service marks of 
Ariel, MAYAN and of other companies.                                            

Dividend Information                                                            

Neither Ariel nor MAYAN has ever paid any cash dividends on its stock, and
Ariel anticipates that, following the merger, it will continue to retain any    
earnings for the foreseeable future for use in the operation of its business.   

Forward-Looking Statements in this Document                                     

This document contains forward-looking statements within the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 with respect 
to Ariel's and MAYAN's financial condition, results of operations and business  
and the expected impact of the merger on Ariel's financial performance. Words   
such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"      
"estimates" and similar expressions indicate forward-looking statements. These  
forward-looking statements are not guarantees of future performance and are     
subject to risks and uncertainties that could cause actual results to differ    
materially from the results contemplated by the forward-looking statements. In  
evaluating the merger, you should carefully consider the discussion of risks    
and uncertainties in the section entitled "Risk Factors" beginning on page 18.  
You are cautioned not to place undue reliance on these forward looking          
statements, which reflect the views of Ariel's or MAYAN's management only as of 
the date of this prospectus. We undertake no obligation to update these         
statements or publicly release the results of any revisions to the forward-     
looking statements that we may make to reflect events or circumstances after    
the date of this prospectus or to reflect the occurrence of unanticipated       
events.                                                                         

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ARIEL SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA 

The information in the following selected consolidated financial data has 
been derived from Ariel's consolidated financial statements. You should read    
this information in conjunction with "Management's Discussion and Analysis of   
Financial Condition and Results of Operation" and Ariel's financial statements  
and the notes to those financial statements appearing elsewhere in this         
document. Consolidated balance sheets as of March 31, 2001 and the related      
consolidated statements of income and cash flow for each of the three months    
ended March 31, 2001 and 2000 were not audited. Consolidated balance sheets as  
of December 31, 1999 and 2000 and the related consolidated statements of income 
for each of the three years in the period ended December 31, 2000 were audited  
by PricewaterhouseCoopers LLP independent accountants, and are included         
elsewhere in this joint proxy statement prospectus. The report of               
PricewaterhouseCoopers LLP which is included in this document contains an       
explanatory paragraph relating to Ariel's ability to continue as a going        
concern as described in Note 1 to such financial statements.                    

                                                        [Enlarge/Download Table]

                                                                                                 Three Months Ended     
                                              Year Ended December 31,                                 March 31,         
                          -------------------------------------------------------------------  ------------------------ 
                             1996          1997          1998          1999          2000         2000         2001     
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 
                                                                                                     (unaudited)        
                                                                                                                        
Consolidated Statements                                                                                                 
of Operations Data:                                                                                                     
Sales...................  $13,030,637  $ 13,201,916  $ 17,445,829  $ 11,626,546  $  8,007,074  $ 2,072,221  $   881,656 
Cost of goods sold......    6,482,147     7,180,241    11,965,220     5,096,014     4,497,804      868,374      625,508 
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 
 Gross profit...........    6,548,490     6,021,675     5,480,609     6,530,532     3,509,270    1,203,847      256,148 
Operating Expenses:                                                                                                     
Selling and marketing...    3,952,723     4,400,786     5,265,542     5,634,070     5,683,349    1,266,834    1,064,854 
General and                                                                                                             
 administrative.........    6,383,192     6,145,088     9,710,275     7,312,680     6,277,270    1,468,396    1,935,011 
Research and development                                                                                                
 net....................    5,758,413     8,182,584     6,722,905     5,688,414     5,321,127    1,281,626    1,090,516 
Restructuring charge....          --        379,454           --        369,528     2,356,656          --           --  
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 
 Total operating                                                                                                        
  expenses..............   16,094,328    19,107,912    21,698,722    19,004,692    19,638,402    4,016,856    4,090,380 
Loss from operations....   (9,545,838)  (13,086,237)  (16,218,113)  (12,474,160)  (16,129,132)  (2,813,009)  (3,834,232)
Gain on sale of assets..          --            --     29,537,896           --            --           --           --  
Total other income                                                                                                      
 (expense)..............      744,381       324,838      (874,645)      (25,655)       57,142           32       14,602 
Income/(loss) before                                                                                                    
 income taxes...........   (8,801,457)  (12,761,399)   12,445,138   (12,499,815)  (16,071,990)  (2,812,977)  (3,848,834)
 Income tax expense                                                                                                     
  (benefit).............          --            --        368,632           --       (423,938)         --           --  
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 
 Net income/(loss)......  $(8,801,457) $(12,761,399) $ 12,076,506  $(12,499,815) $(15,648,052) $(2,812,977) $(3,848,834)
                          ===========  ============  ============  ============  ============  ===========  =========== 
Earnings/(loss) per                                                                                                     
 share:                                                                                                                 
 Basic..................  $     (1.10) $      (1.39) $       1.25  $      (1.27) $      (1.23) $     (0.24) $     (0.29)
 Diluted................  $     (1.10) $      (1.39) $       1.11  $      (1.27) $      (1.23) $     (0.24) $     (0.29)
Weighted average number                                                                                                 
 of common shares                                                                                                       
 outstanding:                                                                                                           
 Basic..................    7,979,249     9,161,758     9,652,664     9,843,402    12,726,382   11,703,359   13,073,920 
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 
 Diluted................    7,979,249     9,161,758    10,843,215     9,843,402    12,726,382   11,703,359   13,073,920 
                          -----------  ------------  ------------  ------------  ------------  -----------  ----------- 

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                                                        [Enlarge/Download Table]

                                                December 31,                                   
                         ---------------------------------------------------------- March 31,  
                            1996        1997        1998        1999        2000       2001    
                         ----------- ----------- ----------- ----------- ---------- ---------- 
                                                                                    (unaudited)
                                                                                               
Consolidated Balance                                                                           
 Sheet Data:                                                                                   
Cash, cash equivalents                                                                         
 and marketable                                                                                
 securities............. $10,625,960 $ 2,645,864 $17,996,575 $ 7,088,431 $1,129,246 $  423,477 
Working capital                                                                                
 (deficiency)...........  13,795,614   4,329,018  12,632,033   7,827,522  2,385,855   (732,648)
Equipment, net..........   2,036,897   2,382,645   1,365,354   1,387,128  1,261,112  1,058,656 
Total assets............  20,103,064  11,121,667  33,682,380  19,817,072  9,208,051  5,549,845 
Long-term debt and                                                                             
 capital leases.........         --    2,367,147     332,834   2,004,886  1,373,687  1,142,981 
Stockholders equity                                                                            
 (deficiency)...........  16,198,896   5,133,213  19,705,497  10,997,239  3,718,191   (143,082)

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MAYAN SELECTED HISTORICAL FINANCIAL DATA

  The following selected financial data of MAYAN should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results   
of Operations of MAYAN" and its financial statements and notes thereto included 
elsewhere in this joint proxy statement/prospectus. MAYAN derived its statement 
of operations data for the period from July 30, 1997 (inception) through June   
30, 1998 and for the years ended June 30, 1999 and 2000 and the balance sheet   
data as of June 30, 1999 and 2000 from its audited financial statements that    
have been included elsewhere in this joint proxy statement/prospectus. The      
balance sheet data as of June 30, 1998 are derived from MAYAN's audited         
financial statements not included in this joint proxy statement/prospectus. The 
statement of operations data for the nine months ended March 31, 2000 and 2001  
and the period from July 30, 1997 (inception) to March 31, 2001 (cumulative)    
and the balance sheet data as of March 31, 2001 is derived from MAYAN's         
unaudited financial statements included elsewhere in this joint proxy           
statement/prospectus. Historical results are not necessarily indicative of the  
results to be expected in the future.                                           

                                                        [Enlarge/Download Table]

                                                                                 Period from 
                          Period from      Year Ended          Nine Months      July 30, 1997
                         July 30, 1997      June 30,         Ended March 31,     (Inception) 
                         (Inception) to ------------------  ------------------  through March
                         June 30, 1998    1999      2000      2000      2001      31, 2001   
                         -------------- --------  --------  --------  --------  -------------
                                                               (unaudited)      (Cumulative) 
                                                                                 (unaudited) 
                                                  (in thousands)                             
                                                                                             
Statement of Operations                                                                      
 Data:                                                                                       
Operating expenses:                                                                          
 Research and                                                                                
  development (exclusive                                                                     
  of noncash                                                                                 
  compensation                                                                               
  expense)..............     $  292     $ 10,676  $ 34,516  $ 18,041  $ 23,959    $ 69,443   
 Sales and marketing                                                                         
  (exclusive of noncash                                                                      
  compensation                                                                               
  expense)..............        115          395     2,921     2,073     7,367      10,798   
 General and                                                                                 
  administrative                                                                             
  (exclusive of noncash                                                                      
  compensation                                                                               
  expense)..............        206        1,509     4,653     2,043     7,650      14,018   
 Amortization of                                                                             
  deferred stock                                                                             
  compensation*.........        --           --      1,112       363     3,675       4,787   
                             ------     --------  --------  --------  --------    --------   
  Total operating                                                                            
   expenses.............        613       12,580    43,202    22,520    42,651      99,046   
Interest income, net....         (9)        (409)   (2,508)   (1,750)   (2,795)      6,086   
Interest expense                                                                             
 including accretion of                                                                      
 redemption premium.....        --            34       163       124     5,889      (5,721)  
                             ------     --------  --------  --------  --------    --------   
  Net loss..............     $ (604)    $(12,205) $(40,857) $(20,894) $(45,745)   $(99,411)  
                             ======     ========  ========  ========  ========    ========   
Basic and diluted net                                                                        
 loss per share.........     $(1.65)    $  (5.46) $ (10.00) $  (5.79) $  (6.84)   $ (31.25)  
                             ======     ========  ========  ========  ========    ========   
Shares used in                                                                               
 calculating basic and                                                                       
 diluted net loss per                                                                        
 share..................        367        2,236     4,085     3,608     6,685       3,181   
                             ======     ========  ========  ========  ========    ========   
Pro forma basic and                                                                          
 diluted net loss per                                                                        
 share**................                          $  (1.16)           $  (1.07)              
                                                  ========            ========               
Shares used in                                                                               
 calculating pro forma                                                                       
 basic and diluted net                                                                       
 loss per share**.......                            35,356              42,685               
                                                  ========            ========               
 Research and                                                                                
  development...........     $  --      $    --   $    454  $    110  $  2,683    $  3,137   
 Sales and marketing....        --           --        269        79       273         542   
 General and                                                                                 
  administrative........        --           --        389       174       719       1,108   
                             ------     --------  --------  --------  --------    --------   
                             $  --      $    --   $  1,112  $    363  $  3,675    $  4,787   
                             ======     ========  ========  ========  ========    ========   

--------                                                                        
* Amortization of deferred stock compensation:                                  

--------                                                                        
** Gives retroactive effect to the conversion of all outstanding shares of      
preferred stock into common stock which will occur upon completion of the 
merger with Ariel.                                                        

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                                                                [Download Table]

                                                   June 30,                   
                                            ----------------------  March 31, 
                                             1998   1999    2000       2001   
                                            ------ ------- ------- -----------
                                                                   (unaudited)
                                                      (in thousands)          
                                                                              
Balance Sheet Data:                                                           
Cash, cash equivalents and short-term                                         
 investments............................... $1,035 $17,481 $38,693   $67,285  
Working capital............................    889  16,004  31,887    61,027  
Total assets...............................  1,071  18,445  45,030    81,365  
Long-term debt obligations.................    --      799     523    78,498  
Shareholders' equity (deficiency)..........    923  16,049  36,722    (4,778) 

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SUMMARY UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The summary pro forma combined condensed financial information is derived 
from the unaudited pro forma combined condensed financial information, which    
give effect to the merger as a purchase and should be read in conjunction with  
such unaudited pro forma combined condensed financial information and the notes 
thereto included in this joint proxy statement/prospectus. Ariel's fiscal year  
ends on December 31. For the purposes of the pro forma information, MAYAN's     
statement of operations for the year ended June 30, 2000 has been combined with 
Ariel's unaudited consolidated statement of operations for the twelve months    
ended June 30, 2000, MAYAN's unaudited statement of operations for the nine     
months ended March 31, 2001 has been combined with Ariel's unaudited            
consolidated statement of operations for the nine months ended March 31, 2001   
and MAYAN's unaudited balance sheet as of March 31, 2001 has been combined with 
Ariel's unaudited consolidated balance sheet as of March 31, 2001. The          
unaudited pro forma combined condensed statements of operations give effect to  
the Ariel Merger as if it had occurred on July 1, 1999.                         

The unaudited pro forma combined condensed financial information is       
presented for illustrative purposes only and is not necessarily indicative of   
the future financial position or future results of operations of MAYAN after    
the merger or of the financial position or results of operations of MAYAN that  
would have actually occurred had the merger been effected as of the dates       
described above.                                                                

The allocation of the purchase price reflected in the unaudited pro forma 
combined condensed financial information is preliminary. The actual purchase    
price allocation to reflect the fair values of assets acquired and liabilities  
assumed will be based upon management's evaluation of such assets and           
liabilities after the merger. Accordingly, the adjustments included here will   
change based upon the final allocation of the total purchase price, as adjusted 
to reflect stock values. That allocation may differ significantly from the      
preliminary allocation included in this statement.                              

The unaudited pro forma combined condensed financial information should be
read in conjunction with the audited consolidated financial statements and      
related notes of Ariel, and the audited financial statements of MAYAN, Ariel's  
Management Discussion and Analysis of Financial Condition and Results of        
Operations and MAYAN's Management Discussion and Analysis of Financial          
Condition and Results of Operations included in this joint proxy                
statement/prospectus.                                                           

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SUMMARY UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(In thousands, except per share amounts)

                                                                [Download Table]

                                                                        Nine   
                                                              Year     Months  
                                                             Ended     Ended   
                                                            June 30,   March   
                                                              2000    31, 2001 
                                                            --------  -------- 
                                                                               
Pro Forma Combined Condensed Statement of Operations Data:                     
Total revenues............................................  $  8,971  $  5,719 
Amortization of intangibles...............................     8,578     6,434 
Amortization of deferred stock compensation...............     1,233     3,765 
Operating loss............................................   (67,679)  (59,529)
Net loss..................................................   (65,379)  (62,168)
Pro forma basic and diluted net loss per share............  $  (0.51) $  (0.40)
Shares used in calculating pro forma basic and diluted net                     
 loss per share...........................................   128,892   155,215 

                                                                [Download Table]

                                                                         As of  
                                                                       March 31,
                                                                         2001   
                                                                       ---------
                                                                                
Pro Forma Combined Condensed Balance Sheet Data:                                
Cash, cash equivalents and short-term investments..................... $ 67,708 
Working capital.......................................................   57,027 
Total assets..........................................................  110,849 
Long-term debt obligations............................................   78,574 
Shareholders' equity..................................................   16,813 

                                                                [Download Table]

                                                                         As of  
                                                                       March 31,
                                                                         2001   
                                                                       ---------
                                                                                
Pro Forma Combined Condensed Book Value Per Share:                              
Historical MAYAN......................................................  $(0.10) 
Historical Ariel......................................................   (0.01) 
Combined Pro Forma per share..........................................    0.10  

The historical book value per share is computed by dividing shareholders' 
deficiency by the number of shares of stock outstanding at March 31, 2001. The  
combined proforma book value per share is calculated by dividing the pro forma  
shareholders' equity by the pro forma number of shares of MAYAN common stock    
outstanding as of March 31, 2001 assuming the merger had occurred as of March   
31, 2001.                                                                       

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RISK FACTORS

By voting in favor of the merger, MAYAN shareholders will be choosing to  
invest in Ariel common stock. An investment in Ariel common stock involves a    
high degree of risk. By voting in favor of the merger, Ariel stockholders will  
be choosing to become equityholders in the surviving company, which could       
expose the stockholders to a high degree of risk. In addition to the other      
information contained in this proxy statement/prospectus, you should carefully  
consider the following risk factors in deciding whether to vote for the merger. 
If any of the following risks actually occur, the business and prospects of     
MAYAN or Ariel may be seriously harmed. In such case, the trading price of      
Ariel common stock would decline, and you may lose all or part of your          
investment.                                                                     

Risks Related to the Merger 

MAYAN shareholders will receive a fixed number of shares of Ariel common stock  
despite changes in market value of Ariel common stock                           

Upon the merger's completion, each share of MAYAN common stock will be    
exchanged for a fixed number of shares of Ariel common stock. There will be no  
adjustment for changes in the market price of Ariel common stock. In addition,  
neither MAYAN nor Ariel may terminate the merger agreement or "walk away" from  
the merger or resolicit the vote of its stockholders solely because of changes  
in the market price of Ariel common stock. Accordingly, the dollar value of     
Ariel common stock that MAYAN shareholders will receive upon the merger's       
completion will depend on the market value of Ariel common stock when the       
merger is completed and may decrease from the date MAYAN shareholders submit    
their proxy. The share price of Ariel common stock is by nature subject to the  
general price fluctuations in the market for publicly traded equity securities  
and has experienced significant volatility. In addition, the stock market has   
experienced significant price and volume fluctuations unrelated to the          
operating performance of particular companies. These fluctuations may continue  
to affect the stock prices of technology companies, such as Ariel, in           
particular. MAYAN and Ariel urge you to obtain recent market quotations for     
Ariel common stock. Ariel cannot predict or give any assurances as to the       
market price of Ariel common stock at any time before or after the completion   
of the merger.                                                                  

MAYAN and Ariel may not achieve the benefits they expect from the merger        

 MAYAN and Ariel entered into the merger agreement with the expectation that
the merger will result in certain benefits. Achieving the benefits of the       
merger depends on the timely, efficient and successful execution of a number of 
post-merger events. Key events include:                                         

. integrating the operations and personnel of the two companies;            

. offering the existing products of each company to the other company's     
customers; and                                                          

. developing new products that utilize the assets of both companies.        

 MAYAN and Ariel will need to overcome significant issues, however, in order
to realize any benefits or synergies from the merger. The successful execution  
of these post-merger events will involve considerable risk and may not be       
successful.                                                                     

Operations and personnel. MAYAN designs, develops and markets             
telecommunications networking solutions to address the bandwidth constraints,   
complexity and service limitations of metropolitan edge networks. Ariel         
provides open systems-based digital remote access equipment to internet service 
providers that enables the ISPs to build reliable, scalable and easy to manage  
networks at a cost significantly below available alternatives. Each of MAYAN    
and Ariel has very limited experience in the other's business. Furthermore,     
MAYAN's principal offices are located in San Jose, California, while Ariel's    
principal offices are located in Cranbury, New Jersey. In order for the merger  
to be successful, MAYAN and Ariel must successfully integrate MAYAN's           
operations and personnel with Ariel's operations and personnel. Failure to      
complete the integration successfully could result in the loss of key personnel 
and customers.                                                                  

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  Products. Each company initially intends to offer its respective products to
customers of the other company. There can be no assurance that either company's 
customers will have any interest in the other company's products. The failure   
of these cross-marketing efforts would diminish the anticipated cost savings    
from this merger.                                                               

MAYAN's product is in the development phase and is not yet ready for      
commercial manufacturing or deployment, and MAYAN and Ariel cannot assure you   
that the substantial efforts necessary to complete development of the product   
and achieve commercial acceptance will be successful. In addition, MAYAN        
intends after the merger to develop new products that combine the assets of     
both the Ariel and MAYAN businesses. To date, the companies have not thoroughly 
investigated the obstacles, technological, market-driven or otherwise, to       
developing and marketing these new products in a timely and efficient way.      
There can be no assurance that MAYAN will be able to overcome these obstacles,  
or that there will be a market for new products and services developed by MAYAN 
after the merger.                                                               

In general, MAYAN and Ariel cannot offer any assurances that the combined 
company can successfully integrate or realize the anticipated benefits of the   
merger. Their failure to do so could have a material adverse effect on the      
combined company's business, financial condition and operating results and      
could result in the loss of key personnel. In addition, the attention and       
effort devoted to the integration of the two companies will significantly       
divert management's attention from other important issues, and could seriously  
harm the combined company.                                                      

The departure of key personnel or the failure to attract qualified employees    
may negatively impact the business of the combined company                      

The ability of the combined company to maintain its competitive position  
will depend, in large part, on its ability to attract and retain highly         
qualified development and managerial personnel. Competition for these personnel 
is intense. While the merger will increase the combined company's human         
resources in this area, there is always a risk of departure of key employees    
due to the combination process. The announcement of the proposed merger may     
impede the combined company's ability to attract and retain personnel before    
and after these transactions. The loss of a significant group of key personnel  
would adversely affect the combined company's product development efforts.      

The merger could adversely affect combined financial results                    

If and when the merger is completed, the combined company will incur a    
charge for in-process research and development, which we currently estimate     
will be approximately $0.5 million. The actual charge the combined company      
incurs could be greater than this estimate, which could have a material adverse 
effect on its results of operations and financial condition. The combined       
company will also succeed to all of the liabilities of Ariel, whether now known 
or discovered in the future. Additionally, if the benefits of the merger do not 
exceed the costs associated with the merger, including any dilution to Ariel's  
stockholders resulting from the issuance of shares in connection with the       
merger, the combined company's results could be adversely affected.             

The debt that Ariel will assume in connection with the merger may limit the     
combined company's financing options in the future and could weaken its         
business                                                                        

MAYAN has $75.0 million of existing notes outstanding some or all of which
may be exchanged into up to $50.0 million of exchange notes in the exchange     
offer. These existing notes, or to the extent they are tendered for exchange    
notes pursuant to the exchange offer, the exchange notes, will become the       
obligations of the combined company after the merger. This indebtedness could   
adversely affect the combined company in a number of ways, including:           

. limiting the combined company's ability to obtain additional financing in 
the future;                                                             

. limiting the combined company's flexibility to plan for, or react to,     
changes in its business;                                                

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. requiring the combined company to use a substantial portion of its cash   
flow from operations or utilize a significant portion of cash on hand to
repay the debt when due, rather than for other purposes, such as product
development, marketing or capital expenditures;                         

. making the combined company more highly leveraged than some of its        
competitors, which may place it at a competitive disadvantage; and      

. making the combined company more vulnerable to a downturn in its business 
or the economy generally.                                               

Additionally, if the holders of the existing notes or exchange notes      
convert their notes into the combined company's common stock, Ariel would have  
to issue a significant number of shares of additional common stock.             

The lack of a public market for the common stock of MAYAN makes it difficult    
to evaluate the fairness of the exchange ratio or the future market price of    
the shares of common stock of the combined company                              

There is currently no public market for MAYAN common stock, and as a      
result, the exchange ratio was primarily determined based on negotiations       
between the parties. Accordingly, it is difficult to predict how the stock of   
the combined company will trade following the merger. MAYAN cannot determine    
whether an active trading market will develop for the stock of the combined     
company. Moreover, there can be no assurance that the stock of the combined     
company will continue to trade in the Nasdaq National Market. Even if an        
active trading market does develop for the common stock of the combined         
company, there can be no assurance that the market will be sustained or that    
the market price initially established for the shares of common stock of the    
combined company will approximate the market value of the equivalent number of  
shares of Ariel common stock prior to the merger, or that the market price of   
the common stock of the combined company will not decline in value.             

The limited operating history of MAYAN makes it difficult to evaluate the       
business and prospects of the combined company                                  

Given MAYAN's limited operating history and the fact that MAYAN has sold  
only trial quantities of its products and has not yet realized any revenues,    
it is not possible to predict whether the combined company will be able to      
achieve long-term growth and profitability. The likelihood of the combined      
company's success must be considered in light of the problems, expenses,        
difficulties and delays frequently encountered with the rapid expansion of a    
high-technology business, particularly companies in the rapidly evolving        
telecommunications network infrastructure market.                               

The market price of Ariel's common stock may decline as a result of the merger  

The market price of Ariel's common stock may decline as a result of the   
merger if, among other things:                                                  

. the integration of Ariel and MAYAN is unsuccessful;                       

. the combined company does not achieve the perceived benefits of the       
merger as rapidly or to the extent anticipated by financial or industry 
analysts or investors; or                                               

. the effect of the merger on Ariel's financial results is not consistent   
with the expectations of financial or industry analysts or investors.   

The market price of the Ariel common stock could also decline as a result 
of factors related to the merger which may currently be unforeseen. A decline   
in the market price of the Ariel common stock could materially affect the       
combined company.                                                               

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Ariel's and MAYAN's officers and directors have conflicts of interest that may  
influence them to support or approve the merger                                 

The directors and officers of MAYAN participate in arrangements and have  
continuing indemnification against liabilities that provide them with interests 
in the merger that are different from, or in addition to, yours, including the  
following:                                                                      

. Esmond Goei, Chief Executive Officer and a director of MAYAN, is          
currently serving as Vice-Chairman of Ariel's board of directors and    
beneficially owns, or has the right to acquire,          shares of Ariel
common stock, after giving effect to the one for     reverse stock split
 which is expected to occur immediately prior to the effective time of the
merger, and 1,835,670 shares of MAYAN capital stock.                    

. Dennis Schneider, Chief Executive Officer of Ariel, has agreed to be the  
 Senior Vice President of Marketing of the combined company and may have a
conflict of interest because he will continue to be employed following  
the merger.                                                             

. Ariel has agreed to cause the combined company in the merger to indemnify 
each present and former MAYAN officer and director against liabilities  
arising out of that person's services as an officer or director. Ariel  
will cause the combined company to maintain officers' and directors'    
 liability insurance to cover any such liabilities for the next six years.

. Ariel has agreed that Esmond Goei and John Tingleff, Chief Financial      
Officer of MAYAN, will join Ariel as Chief Executive Officer and Chief  
Financial Officer, respectively, of Ariel following the merger.         

. Ariel has agreed that Esmond Goei, Thomas Edrington, Steven Krausz, Jim   
Mongiello and Peter Morris, all members of the board of directors of    
MAYAN, will join Ariel's board of directors following the merger.       

. As of March 31, 2001, the executive officers and directors of MAYAN and   
their affiliates owned an aggregate of 5,620,500 shares of MAYAN common 
 stock and 20,036,145 shares of MAYAN preferred stock. Additionally, as of
March 31, 2001, the executive officers and directors of MAYAN held      
options to purchase an aggregate of 1,828,170 shares of MAYAN common    
stock, which will be assumed by Ariel and be converted into options to  
purchase Ariel common stock.                                            

For the above reasons, the directors and officers of Ariel and MAYAN could
be more likely to vote to approve the merger agreement than if they did not     
hold these interests. Ariel and MAYAN stockholders should consider whether      
these interests may have influenced these directors and officers to support or  
recommend the merger.                                                           

Failure to complete the merger could negatively impact Ariel's stock price and  
future business and operations and could result in the delisting of Ariel's     
stock from the Nasdaq National Market                                           

If the merger is not completed for any reason, Ariel may be subject to a  
number of material risks, including the following:                              

. Ariel has limited financial resources available to support its ongoing    
operations, fund product development programs and market new competitive
technology, and pay its obligations as they become due. Additionally,   
Ariel has experienced negative cash flows from operations for a         
substantial period. These factors raise substantial doubt concerning    
Ariel's ability to independently continue as a going concern if the     
merger is not completed;                                                

. Ariel's continued operations would depend upon cash flows from            
operations, if any, and the availability of additional equity or debt   
financing. In light of Ariel's current cash and working capital         
positions, and the cash requirements of marketing expenditures which    
would be necessary in order to position Ariel to operate on a positive  
cash-flow basis, it is uncertain that Ariel would be able to generate   
sufficient cash flow from operations to fund its short-term capital     
needs. Ariel does not currently have sufficient working capital to      
effectively operate;                                                    

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. Ariel may not be able to satisfy Nasdaq's maintenance requirements, and   
as a result may have its common stock delisted from the Nasdaq National 
Market. Although the Nasdaq National Market has not advised Ariel of any
action to delist Ariel's shares, Ariel can make no prediction as to     
whether, if it were to continue as an independent business and not      
consummate the merger, it could maintain a continued listing of its     
common stock on the Nasdaq National Market or any other national        
securities exchange;                                                    

. Ariel would be required to repay any amounts advanced to Ariel by MAYAN   
under the bridge loan which the parties executed in connection with the 
merger. If Ariel is unable to repay those amounts, MAYAN may have a     
security interest in all of Ariel's assets, including its intellectual  
property, and MAYAN may be able to foreclose on those assets (subject to
Transamerica Business Credit Corporation's senior security interest in  
those assets). See "The Merger--Bridge Loan;"                           

. the price of Ariel common stock may decline to the extent that the        
current market price of Ariel common stock reflects a market assumption 
that the merger will be completed;                                      

. Ariel may be required, if it terminates the merger agreement under        
limited circumstances, to pay the reasonable expenses of MAYAN incurred 
in connection with the merger; and                                      

. costs incurred by Ariel related to the merger, such as legal, accounting  
and financial advisor fees, must be paid even if the merger is not      
completed.                                                              

 In addition, Ariel customers and suppliers, in response to the announcement
of the merger, may delay or defer decisions concerning Ariel. Any delay or      
deferral in those decisions by Ariel customers or suppliers could have a        
material adverse effect on Ariel's business, regardless of whether the merger   
is ultimately completed. Similarly, current and prospective Ariel employees may 
experience uncertainty about their future roles with the combined company until 
the combined company's strategies with regard to Ariel are announced or         
executed. This may adversely affect Ariel's ability to attract and retain key   
management, sales, marketing and technical personnel.                           

Further, if the merger is terminated and Ariel's board of directors       
determines to seek another merger or business combination, there can be no      
assurance that it will be able to find a partner willing to pay an equivalent   
or more attractive price than the price to be paid in the merger. In addition,  
while the merger agreement is in effect and other than very narrowly defined    
exceptions, Ariel is prohibited from soliciting, initiating or encouraging or   
entering into extraordinary transactions, such as a merger, sale of assets or   
other business combination, with any party other than MAYAN.                    

If the common stock of the combined company is not authorized for listing on    
the Nasdaq National Market, MAYAN may refuse to consummate the merger           

 MAYAN and Ariel will apply for a conditional listing on the Nasdaq National
Market on behalf of the combined company, which is expected to take effect on   
official notice of issuance following the closing of the merger. Although it is 
expected that after giving effect to the merger and the reverse split of the    
Ariel common stock the combined company will satisfy the minimum requirements   
for listing on the Nasdaq National Market, there can be no assurance that the   
combined company's common stock will be accepted for listing. It is a condition 
to the obligations of both MAYAN and Ariel under the merger agreement that the  
combined company's common stock be approved for listing on the Nasdaq National  
Market. If the combined company's common stock is not approved for listing, the 
merger may not be consummated unless the condition is waived by MAYAN. MAYAN    
currently has no intention of waiving that condition.                           

After the merger, the combined company will be a publicly traded company with   
Securities Exchange Act of 1934 reporting obligations which will require        
significant disclosure requirements                                             

The Securities Exchange Act of 1934 will require that the combined company
provide information about its business and financial results. The preparation   
of this information is time consuming and costly and it will                    

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require the assistance of legal counsel and accountants. Therefore, the costs   
of legal counsel and accountants will increase dramatically. In addition,       
because the combined company's stock will be publicly traded, the company will  
be required to expand its investor relations department to accommodate the      
needs of a much larger number of shareholders. Furthermore, as a result of the  
public market for its stock and the increase in the number of shareholders, the 
exposure to, and risk of, shareholder suits against the combined company or its 
officers and directors will increase.                                           

The combined company expects its stock price to be volatile                     

 The price at which the combined company's common stock will trade after the
merger is likely to be highly volatile and may fluctuate substantially due to   
many factors, some of which are:                                                

. actual or anticipated fluctuations in its results of operations;          

. changes in securities analysts' expectations or its failure to meet those 
expectations;                                                           

. announcements of technological innovations or content relationships by    
the combined company or its competitors;                                

. introduction of new products by the combined company or its competitors;  

. additions or departures of key personnel;                                 

. commencement of litigation;                                               

. developments with respect to intellectual property rights;                

. conditions and trends in technology industries;                           

. changes in the estimation of the future size and growth rate of its       
markets;                                                                

. general market conditions; and                                            

. future sales of its common stock.                                         

In addition, the stock market has experienced significant price and volume
fluctuations that affected the market price for the common stock of many        
technology and telecommunications companies. These market fluctuations were     
sometimes unrelated or disproportionate to the operating performance of these   
companies. Any significant stock market fluctuations in the future, whether due 
to its actual performance or prospects or not, could result in a significant    
decline in the market price of its common stock.                                

Anti-takeover provisions in the combined company's charter documents and in     
Delaware law could prevent or delay a change in control and, as a result,       
negatively impact its shareholders                                              

  Provisions of the combined company's certificate of incorporation and bylaws
following the merger may discourage, delay or prevent a merger or acquisition   
or make removal of incumbent directors or officers more difficult. These        
provisions may discourage takeover attempts and bids for its common stock at a  
premium over the market price. These provisions include:                        

. the Ariel Stockholder Rights Plan, as described under the section         
entitled "The Merger--Ariel Rights Plan" on page 87;                    

. the ability of its board of directors to alter its bylaws without         
shareholder approval;                                                   

. the restriction on the ability of shareholders to call special meetings;  

. the prohibition on the ability of its shareholders to act by written      
consent;                                                                

. the establishment of advance notice requirements for nominations for      
election to its board of directors or for proposing matters that can be 
acted on by shareholders at shareholders meetings; and                  

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. the establishment of a classified board of directors with staggered,      
three-year terms, which prevents a majority of the board from being     
elected at one time.                                                    

 In addition, the combined company is subject to Section 203 of the Delaware
General Corporation Law, which prohibits a publicly held Delaware corporation   
from engaging in a merger, asset or stock sale or other transaction with an     
interested shareholder for a period of three years following the date that      
person became an interested shareholder, unless prior approval of its board of  
directors is obtained or as otherwise provided. These provisions of Delaware    
law also may discourage, delay or prevent someone from acquiring or merging     
with the combined company without obtaining the prior approval of its board of  
directors, which may cause the market price of MAYAN's common stock to decline. 

Risks Related to MAYAN

MAYAN is a development stage company and its limited operating history makes it 
difficult to evaluate its business and prospects                                

MAYAN was incorporated in July 1997, has sold only trial quantities of its
products and has not realized any revenues. MAYAN's business and ability to     
generate revenues or realize earnings is unproven. MAYAN has only a limited     
operating history and limited historical financial data upon which you may      
evaluate its business and prospects. To date, MAYAN has focused its efforts on  
conducting research and development of the Unifier SMX, its principal product.  
The risks and difficulties frequently encountered by development stage          
companies, particularly companies in the rapidly evolving telecommunications    
network infrastructure market, make its prospects difficult to predict and they 
may change rapidly and without warning.                                         

MAYAN has a history of significant losses, expects to continue to incur         
additional losses and may never achieve profitability                           

  From MAYAN's inception through March 31, 2001, MAYAN incurred cumulative net
losses of approximately $99.4 million. Due to the fact that MAYAN has no        
customers and will not have customers until it completes its product or         
develops a new product which it is able to sell, MAYAN expects to continue to   
incur substantial operating losses and to experience substantial negative cash  
flow as it expands its business and changes its strategic direction. MAYAN      
cannot be certain that it will ever generate sufficient revenues to achieve and 
sustain profitability or continue as a going concern.                           

MAYAN expects its operating expenses to increase significantly as it funds
additional research and development, expands its sales and marketing            
operations, broadens its customer support capabilities and develops its         
distribution channels. MAYAN will also increase spending on capital equipment   
as it continues to develop its products. As its business grows, MAYAN will      
expand its administrative functions and related expenses. MAYAN's operating     
expenses are largely based on anticipated revenues and a high percentage of its 
expenses are, and will continue to be, fixed in the short term, significant and 
difficult to reduce.                                                            

The Unifier SMX is currently MAYAN's only product and it is still undergoing    
testing and development                                                         

MAYAN's revenues are entirely dependent on the commercial success of the  
Unifier SMX. MAYAN has not completed development of this product, has only      
tested it on a limited basis, which tests have not been favorable, and has sold 
only trial quantities of this product. MAYAN must further develop the Unifier   
SMX, as well as perform additional testing to ensure that it functions          
properly, before it will be able to realize revenues from sales of the product. 
MAYAN may scale back development of the Unifier SMX. MAYAN expects that in      
order to gain market acceptance, the Unifier SMX must function properly and     
satisfy tests and certifications required by its potential customers, over      
which MAYAN has no control. For example, its customers may require that its     
products receive the Network Equipment-Building System, or NEBS, certification, 
the Operating System Modifications for the Integration of Network Elements, or  
OSMINE, certification and/or the Trunk                                          

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Inventory Record Keeping, or TIRK, certification. There can be no assurance     
that MAYAN will be able to successfully complete the development of the Unifier 
SMX or any other product or that the Unifier SMX or any of its future products  
will meet its potential customers' testing and certification requirements.      

 MAYAN can give no assurance that its development and marketing efforts will
result in a commercially viable product, that the Unifier SMX will be           
interoperable with current or future telecommunications network systems, that   
customers will purchase the product as it is currently configured or that it    
will be able to reconfigure it in a way so as make it acceptable to customers.  
MAYAN can give no assurance that the development of the Unifier SMX will not    
take longer than planned, or that having to rework components of the Unifier    
SMX will not delay delivery of the Unifier SMX to its prospective customers.    
The networking industry is characterized by rapid technological change, and     
market and product developments may render the Unifier SMX obsolete before it   
goes to commercial production. Furthermore, MAYAN's development efforts may not 
be successful and the Unifier SMX may not be reliable or effective, or capable  
of being manufactured in commercial quantities at acceptable costs. MAYAN can   
give no assurance that its lab and field trials will be successful. Even if the 
Unifier SMX development program is successfully completed and the product is    
successfully tested by prospective customers, these prospective customers may   
demand further enhancements or wait for later releases of the Unifier SMX       
before purchasing the product. As a result of MAYAN's dependence on a single    
product and its current focus of its resources on the Unifier SMX, MAYAN's      
failure to successfully develop, test, market and sell the Unifier SMX on a     
timely basis, if at all, would have a material adverse effect on its business.  
Due to the complexity of the Unifier SMX, as well as its current and            
prospective customers' network architectures, MAYAN's present and future        
customers may encounter significant problems with the Unifier SMX, which could  
negatively affect sales of the Unifier SMX. If MAYAN's target customers do not  
widely purchase, deploy and use the Unifier SMX, or if its current or future    
customers become dissatisfied with the Unifier SMX, sales could decrease and    
our business would be seriously harmed.                                         

The Unifier SMX may not achieve market acceptance                               

Currently MAYAN has only trial customers for the Unifier SMX and a small  
number of prospective customers. MAYAN cannot be certain that there will be a   
demand for its product once it is available, or that the demand will grow.      
MAYAN currently anticipates that demand will not grow. Demand for its product   
will depend on the continued growth of data traffic volume and its prospective  
customers' need to expand the capacity of existing fiber optic                  
telecommunications networks in metropolitan areas. MAYAN does not know if the   
volume of data traffic or the requirement for increased bandwidth in existing   
fiber optic networks will continue to grow, or that the growth will create a    
demand for its products. Because the market is new, it is difficult to predict  
how it will develop and at what rate it will grow, if at all. MAYAN's ability   
to attract customers could also be affected by:                                 

. failure of its product to perform as expected;                            

. delays or difficulties in completing the development and introduction of  
its planned products or product enhancements, including any difficulties
handling current and future data protocols;                             

. unwillingness of potential customers to adopt its current or future       
products;                                                               

. difficulties in meeting customers' delivery requirements;                 

. introductions of new products by MAYAN or its competitors;                

. other competitive factors such as aggressive pricing or financing by its  
competitors;                                                            

. changes in technology, including the rapid adoption of optical            
technologies at the edge of the network that are not based on the       
 standard for fiber-optic transmission called synchronous optical network,
or SONET; and                                                           

. decisions by customers to delay, defer or refrain from purchasing its     
 product until later releases with greater functionality become available.

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If one or more of these conditions occur, MAYAN would likely be unable to 
achieve significant revenue growth and its business would be materially         
adversely affected.                                                             

MAYAN is currently undergoing a business transition that may adversely affect   
its business                                                                    

MAYAN may scale back the functionality of the Unifier SMX and develop a   
product which is less complex. MAYAN may also focus on the software and service 
aspects of its business, which it historically has not done. MAYAN's change in  
strategic direction may disrupt its employees, partners, distributors,          
shareholders and potential customers and may create a prolonged period of       
uncertainty, which could have a material adverse effect on its business,        
prospects and financial condition. MAYAN hopes that it will be able to develop  
a working product with this less complex version of its product. If MAYAN is    
not able to develop this less complex version of the Unifier SMX, MAYAN may     
phase out the Unifier SMX entirely. In addition, MAYAN is considering projects  
in which it will jointly develop the products of third parties. MAYAN's change  
in strategy has resulted in substantial changes including, among other things,  
the reduction of its workforce and a change in its potential product offerings. 
Many factors may impact MAYAN's ability to implement a new strategic direction  
for its business including the ability to locate strategic partners, finalize   
agreements with other companies, manage the implementation internally in an     
effective manner, retain, as well as sustain the productivity of, its           
workforce, reduce operating expenses and quickly respond to and recover from    
unforeseen events associated with the business transition. As a result of this  
business transition, it will be difficult to forecast MAYAN's financial         
performance.                                                                    

In addition, as a result of the business transition, many of MAYAN's      
employees, particularly those involved in research and development, have        
already or may in the future terminate their employment. If future terminations 
continue, MAYAN believes that it may need to hire additional employees,         
particularly in the area of research and development, in order to implement a   
new strategic focus that will be successful.                                    

If the number of competing access services declines or if one access service    
standard is adopted, demand for MAYAN's products may decline significantly      

One of the key features of MAYAN's current product is the ability to      
aggregate multiple access services, such as voice, internet protocol, or IP,    
and ethernet. Multiple access services, however, may not be utilized in the     
future. If the telecommunications industry adopts a standard access service or  
if one or relatively few access services are adopted by a substantial portion   
of its potential customers, the market for a product that aggregates multiple   
access services, like the Unifier SMX, would diminish significantly, which      
would seriously harm MAYAN's business, financial condition and results of       
operations.                                                                     

If MAYAN's products do not operate properly with other equipment in its         
customers' networks, MAYAN may suffer product installation delays, order        
cancellations or product returns, and its reputation could be harmed            

MAYAN's products are designed to interface and interoperate with its      
customers' existing networks, each of which has its own specifications and is   
based on various industry standards. Many of its customers' networks contain    
multiple generations of products designed for various different protocols that  
were added as their networks grew and evolved. MAYAN's products must            
interoperate with all existing and future products within these networks. When  
interoperability problems occur, it may be difficult to identify their source   
and fix the problem. Whether or not these problems are due to MAYAN's products, 
it may incur warranty, support and repair costs, need to divert the attention   
of its engineering personnel from its product development efforts and suffer    
customer relations problems. If its products cannot support all widely used     
modes of adequate network access or if its products do not interoperate with    
its customers' networks, product installations could be delayed, orders for its 
products could be cancelled or MAYAN's products could be returned, any of which 
could seriously harm MAYAN's business, financial condition and results of       
operations.                                                                     

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MAYAN's workforce reduction and financial performance may adversely affect the  
morale and performance of its personnel and the ability to hire new personnel   

  In connection with MAYAN's effort to streamline operations, reduce costs and
bring staffing and structure in line with industry standards, it restructured   
in the first quarter of 2001 with reductions in workforce by approximately 64   
employees. There may be future costs associated with the workforce reduction    
related to severance and other employee-related costs, and the restructuring    
plan may yield unanticipated consequences, such as attrition beyond the planned 
reduction in workforce. In addition, the decline in fair market value of        
MAYAN's common stock has decreased the value of the stock options granted to    
employees. As a result of these factors, MAYAN's remaining personnel may seek   
employment with larger, more established companies or companies they perceive   
as having less volatile stock prices.                                           

MAYAN has recently replaced many of its officers, which may disrupt its         
business                                                                        

MAYAN has appointed a new chief executive officer, a new vice president of
operations and a new vice president of worldwide sales, and the integration of  
these officers may interfere with its operations. In March 2001, MAYAN          
announced the appointment of Esmond Goei, the chairman of the board, as chief   
executive officer, replacing Daniel Gatti, and the appointments of Sullivan     
Bookataub as Vice President-Operations, replacing Robert Hernandez and Jim      
Linkous as Senior Vice President-Worldwide Sales replacing Andrew Lovit. The    
transitions of Messrs. Goei, Bookataub and Linkous have resulted and will       
continue to result in disruption to ongoing operations, and these transitions   
may materially harm MAYAN's reputation and the way that the market perceives    
MAYAN and the value of its common stock and the price of the combined company's 
common stock after the merger.                                                  

MAYAN's future success depends on its ability to develop innovative new         
products and product enhancements that gain market acceptance                   

The market for communications networking equipment is marked by rapid     
innovation and evolution. MAYAN may not be able to develop new products or      
product enhancements in a cost effective and timely manner, or at all. Even if  
MAYAN is able to successfully develop and introduce new products and            
enhancements, they may be inferior to similar products or enhancements          
developed by competitors and may fail to achieve broad market acceptance. If    
MAYAN fails to successfully develop and introduce new products or enhanced      
features and functionality for the Unifier SMX, or if future products or        
enhancements fail to achieve widespread market acceptance, its business would   
be seriously harmed.                                                            

 MAYAN's success in developing new and enhanced products and systems as well
as related software will depend upon a variety of factors, including the        
ability to:                                                                     

. develop products, including related software, to integrate the wide       
variety of protocols and transmission rates found at the metro edge;    

. integrate various components of complex and constantly evolving           
technology;                                                             

. complete system designs and testing in a timely and efficient manner;     

. coordinate with third-party manufacturers to implement manufacturing,     
assembly, quality testing and fulfillment processes in a timely and     
efficient manner;                                                       

. reduce costs;                                                             

. achieve high system performance;                                          

. achieve a high degree of quality and reliability in its products and      
systems; and                                                            

. develop and introduce products, software and systems that have better     
functionality and features and that are less expensive than those of its
competitors.                                                            

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MAYAN's revenues and operating results may fluctuate significantly              

MAYAN's revenues, if any, and operating results are likely to fluctuate   
significantly in the future on a quarterly and an annual basis due to a number  
of factors, many of which are outside of its control, including the following:  

. its ability to identify and exploit markets for its products;             

. variations in the timing and size of sales and shipments of products;     

. delays or cancellations of product orders by customers, if any;           

. the ability to obtain sufficient supplies of sole or limited source       
components, including SONET transceiver integrated circuits, or ICs, and
microprocessors;                                                        

. new product introductions and product enhancements by it or its           
competitors;                                                            

. changes in its pricing policies or the pricing policies of competitors;   

. changes in the mix of product configurations, including the number of     
protocol and interface cards that can be inserted into a Unifier SMX,   
that it may sell;                                                       

. the ability to develop, introduce and ship in a timely manner new         
products and product enhancements that meet customer requirements;      

. the ability to attain and maintain production volumes and quality levels  
for products;                                                           

. the ability to control expenses and manufacturing costs;                  

. changes in key personnel;                                                 

. the extent of international expansion;                                    

. changes in and regulation of the telecommunications and related           
industries;                                                             

. costs related to acquisitions of technology or businesses; and            

. general economic conditions as well as those specific to the              
telecommunications and related industries.                              

Due to the foregoing factors, MAYAN believes that quarter-to-quarter      
comparisons of MAYAN's operating results are not a good indication of future    
performance.                                                                    

MAYAN's limited operating history makes it difficult to budget for upcoming     
expenses                                                                        

  MAYAN will need to make decisions in the immediate future regarding resource
allocations for research and development and sales and marketing. It does not   
have the benefit of meaningful historical financial data from which to plan     
these expenditures. If MAYAN's forecasts of future operating expenses turn out  
to be inaccurate, MAYAN may not make the best use of its resources and may      
forego better opportunities. MAYAN's limited operating history makes it         
difficult for investors to gauge its capability in making these resource        
allocation decisions.                                                           

MAYAN expects that a relatively small number of customers will account for      
substantially all of its revenues                                               

  MAYAN currently expects that substantially all of its revenues, if any, will
depend on its ability to sell the Unifier SMX and subsequent products to a      
small number of customers, consisting primarily of telecommunications service   
providers. MAYAN cannot assure you that it will be successful in selling its    
products to service providers, either international or domestic. There are only 
a relatively small number of telecommunications service providers, and the      
substantial capital requirements involved in the establishment of fiber optic   
networks significantly limit additional entrants into this market. If, for any  
reason, any of these service providers do not purchase substantial quantities   
of its product, MAYAN's business would be significantly harmed.                 

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MAYAN's prospective customers may have financial constraints which may limit    
their ability to purchase new products such as the Unifier SMX                  

 Telecommunications service providers make considerable capital expenditures
to expand their networks and to purchase, install and maintain their equipment. 
If some of these service providers are unable to secure financing for these     
expenditures, they may not have the funds necessary to purchase the Unifier     
SMX. Budgetary constraints or cycles may also impact when or if a prospective   
customer will purchase the Unifier SMX. In addition, financial constraints      
recently experienced by some service providers, in particular some competitive  
local exchange carriers, or CLECs, may reduce their ability or willingness to   
purchase new products such as the Unifier SMX. MAYAN's customers may also       
include smaller, start-up companies that could experience cash flow problems,   
resulting in MAYAN not being able to collect from some of them.                 

MAYAN's success will depend on its ability to manage customer relationships     

  MAYAN's ability to achieve sales in the future will depend on its ability to
obtain and fill orders from customers, and maintain relationships with and      
provide support to these customers. In order to effectively manage customer     
relationships, MAYAN will need to satisfy stringent customer performance and    
delivery requirements. Customer relationships in its industry are typically     
structured around detailed, heavily negotiated contracts. As these              
relationships evolve over time, adjustments to product specifications,          
anticipated costs, laboratory and field testing plans, price, customer          
forecasts and delivery timetables, and installation and field support           
requirements may be needed in order to meet customer demands and expectations.  
MAYAN's inability to manage customer relationships would seriously harm its     
business.                                                                       

MAYAN will depend upon a limited number of contract manufacturers with whom     
MAYAN has no or minimal experience, and MAYAN has no internal manufacturing     
capabilities                                                                    

  MAYAN's future success will depend on its ability to have sufficient volumes
of its products manufactured in a cost effective and quality controlled manner. 
Solectron, a third-party contract manufacturer, has expressed interest in       
manufacturing the Unifier SMX. MAYAN cannot guarantee that it will be able to   
enter into or maintain contracts with Solectron or other third-party            
manufacturers. MAYAN does not expect that any contract would ensure product     
availability, establish long-term price or payment terms, or extend credit      
lines to it. MAYAN currently has no internal manufacturing capabilities and it  
has no present intention of developing those capabilities. In addition, because 
the Unifier SMX has not yet been manufactured in commercial quantities, MAYAN   
may experience delays, quality problems or other difficulties once commercial   
production commences. There are a number of additional risks associated with    
its dependence on a limited number of third-party manufacturers, including the  
following:                                                                      

. reduced control over delivery schedules, quality assurance and            
manufacturing yields and cost;                                          

. the potential lack of adequate capacity during periods of excess demand;  

. limited warranties on components supplied;                                

. increases in contract prices;                                             

. the potential misappropriation of intellectual property; and              

. manufacturing disruptions.                                                

Any of these risks could impair MAYAN's ability to fulfill orders on a    
timely basis or at all. As it begins to sell its product and increase its level 
of sales, third-party manufacturers may not be able to meet the delivery and    
quality requirements of MAYAN's customers, which would decrease customer        
satisfaction and have a material adverse effect on its product sales. If        
MAYAN's manufacturers are unable or unwilling to continue manufacturing its     
products in required volumes, for example, it would have to identify and        
qualify one or more alternative manufacturers, if one were so available and     
willing. Qualifying a new contract manufacturer and commencing volume           
production is expensive and time consuming. If MAYAN is required to change or   
qualify                                                                         

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an additional contract manufacturer, it would likely lose revenue and damage    
customer relationships resulting in possible material harm to its business.     

MAYAN is dependent on sole source and limited source suppliers for several key  
components, including its SONET transceiver ICs and its microprocessors, and if 
MAYAN is unable to obtain components on a timely basis, it will be unable to    
meet its customers' product delivery requirements                               

MAYAN currently purchases several key components from single or limited   
sources. In particular, it relies on single source suppliers for its SONET      
transceiver ICs and for its microprocessors. If its sole or limited source      
suppliers suffer from capacity constraints, work stoppages or any other         
reduction or disruption in output, they may be unable to meet MAYAN's delivery  
schedule. In addition, MAYAN receives some of its components from foreign       
suppliers which exposes it to risks associated with international business. If  
its contract manufacturers do not receive critical components in a timely       
manner, MAYAN will be unable to meet a customer's product delivery              
requirements. Any failure to meet a customer's delivery requirements could harm 
MAYAN's reputation and decrease its sales. MAYAN currently has no long-term     
supply contracts to ensure sources of supply. Its suppliers could enter into    
exclusive arrangements with its competitors, stop selling their products to     
MAYAN at commercially reasonable prices or refuse to sell their products to it  
at any price. MAYAN may be unable to develop additional or alternative sources  
from which to purchase components of its products.                              

MAYAN faces several risks from its reliance on single and limited source  
suppliers. These risks include, among others:                                   

. unavailability of, or interruptions in access to, certain process         
technologies;                                                           

. inability to obtain an adequate supply of required components; and        

. limited control over the price, delivery, reliability and quality of      
components and its finished products.                                   

If MAYAN fails to accurately forecast its manufacturing, materials or           
components requirements, it could incur additional costs or experience delays   

  MAYAN expects to provide forecasts of its demand to its manufacturer several
months prior to scheduled delivery of products to its customers. If MAYAN       
underestimates its requirements, its manufacturer may have an inadequate        
inventory, which could interrupt manufacturing of its products and result in    
delays in shipments and revenues. In addition, lead times for materials and     
components that MAYAN or its manufacturer order, including optical equipment    
and microprocessors, vary significantly and depend on many factors such as the  
specific supplier, contract terms and demand for each component at a given      
time. If MAYAN fails to order sufficient quantities of product components in a  
timely manner or if it experiences any delay in receiving product components,   
the manufacturing of its products, and the delivery of those products to its    
customers, could be delayed, which could adversely affect its sales and results 
of operations. In the case of some optical components in short supply,          
component suppliers have imposed strict allocations that limit the number of    
these components they will supply to a given customer in a specified time       
period. These suppliers may choose to increase allocations to larger, more      
established companies, which could reduce MAYAN's allocations and harm MAYAN's  
ability to deliver its products.                                                

 In addition, if MAYAN's sales do not meet its forecasts, it may have excess
or obsolete materials or components, which would increase its costs. If MAYAN   
overestimates its requirements it would need to pay for the excess material and 
component inventory which a manufacturer has obtained on its behalf. As a       
result, MAYAN may be obligated to pay for any overestimated requirements. If    
MAYAN fails to adequately forecast its materials and components requirements in 
the future, it could have a material adverse effect on its business, cash flow  
and results of operations.                                                      

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Declining average selling prices for MAYAN's products may have a material       
adverse effect on its margins                                                   

MAYAN anticipates that if it is able to sell its product, the average     
selling prices and gross margins for the Unifier SMX and subsequent products    
may decline as its products mature, as potential volume price discounts         
expected to be in its sales contracts take effect. In addition, as competition  
intensifies, MAYAN believes it will have to reduce its selling prices in order  
to compete effectively in its industry. MAYAN believes competitive pricing and  
products offered by its competitors will force it to sell the Unifier SMX and   
future products at a price which is below the development and manufacturing     
costs of its products. To offset any decline, MAYAN believes that it must       
introduce and sell new products at higher average selling prices with higher    
gross margins and reduce the costs of its then existing products through lower  
manufacturing costs, design improvements and component cost reduction. If MAYAN 
is unable to increase selling prices or reduce development, manufacturing and   
other costs, MAYAN will not be able to recover the costs associated with        
selling its products, and, as a result, its revenues may decline and its        
operating results will suffer.                                                  

Due to the expected long sales cycle for MAYAN's products, the timing of        
revenue and expenses will be difficult to predict and may cause its operating   
results to fluctuate unexpectedly                                               

The sales and deployment cycle for MAYAN's products is expected to be     
lengthy. It expects that the period of time between initial customer contact    
and an actual purchase order by some customers may span a year or more. The     
length of MAYAN's sales cycle may cause its revenue, expenses and operating     
results to vary unexpectedly from quarter to quarter. A customer's decision to  
purchase MAYAN's products involves a significant commitment of MAYAN's          
resources and a lengthy evaluation and product qualification process, factory   
acceptance and laboratory and field testing. Consequently, MAYAN may incur      
substantial expenses and devote senior management's attention to potential      
customers without achieving significant sales by those potential customers and  
causing MAYAN to miss other sales opportunities. In addition, MAYAN's customers 
are likely to have internal budgeting procedures which may affect the timing of 
their purchases. Its lengthy sales cycle makes it difficult to predict the      
quarter in which MAYAN may recognize revenue from any sale.                     

Because MAYAN's products are complex and are deployed in complex environments,  
they may have errors or defects that are detected only after full deployment,   
which could seriously harm its business                                         

The Unifier SMX and MAYAN's future products are expected to be highly     
intricate products designed to be deployed in large and complex networks. The   
Unifier SMX can only be fully tested when deployed in these networks with high  
amounts of traffic over a significant period of time. MAYAN cannot simulate     
that environment to the extent required to fully test its product.              
Consequently, MAYAN or its customers may discover errors or defects in the      
Unifier SMX only after it has been deployed. If those errors or defects are     
significant, MAYAN may be required to pay monetary damages or to post bonds in  
anticipation of these damages. If MAYAN is unable to quickly fix defects or     
other problems that may be identified upon full deployment, it could            
experience:                                                                     

. loss of or delay in realizing revenues and loss of market share;          

. significant harm to its reputation and loss of customers;                 

. diversion of development resources;                                       

. increased service and warranty costs;                                     

. legal actions by its customers; and                                       

. increased insurance costs.                                                

  A product liability claim, whether successful or not, could seriously impact
MAYAN's capital reserves, harm its reputation and direct the attention of key   
personnel away from its operations, any of which could harm its financial       
condition or limit its growth.                                                  

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MAYAN's markets are highly competitive and dominated by large participants and  
it may not be able to compete effectively                                       

  Competition in the communications networking equipment market is intense and
MAYAN expects competition to increase. The market for networking equipment is   
dominated primarily by manufacturers of legacy SONET equipment, such as Nortel  
Networks Corporation, Lucent Technologies Inc. and Fujitsu Microelectronics,    
Inc. Each of these companies has announced products that may compete with the   
Unifier SMX. In addition, other companies, such as Cisco Systems, Inc., Siara   
Systems, which was recently acquired by Redback Networks, Inc., and a number of 
emerging companies, have developed or are developing products that may compete  
with MAYAN's products. Many of MAYAN's competitors and potential competitors    
have substantially greater name recognition and technical, financial and        
marketing resources than MAYAN has and may have a substantial advantage over    
MAYAN in developing or acquiring new products and technologies and in creating  
market awareness for those products, services and technologies. Further, many   
of MAYAN's competitors have built long-standing relationships with some of      
MAYAN's potential customers and have the ability to provide financing to them   
and may, therefore, have an inherent advantage in selling network equipment     
products to these customers. MAYAN expects its competitors to continue to       
improve the performance of their current products and to introduce new          
products, services and technologies. To be competitive, MAYAN must continue to  
invest significant resources in research and development, sales, marketing and  
customer support. MAYAN may not have sufficient resources to make these         
investments, make the technological advances necessary to be competitive, or be 
able to effectively sell its products to carriers who have prior relationships  
with its competitors.                                                           

If MAYAN cannot compete successfully against its competitors, it could be 
materially and adversely affected by:                                           

. significant reductions in demand for any of its products;                 

. delays or cancellations of future customer orders;                        

. reductions of the prices on any of its products; or                       

. increases in its expenses.                                                

Any acquisitions MAYAN makes could disrupt its business and harm its financial  
condition and operations                                                        

In an effort to effectively compete in the communications networking      
equipment market where increasing competition and industry consolidation        
prevail, MAYAN may acquire complementary businesses, products, technologies or  
services in the future. In the event of any future acquisitions, it could:      

. issue additional stock that would dilute its current shareholders'        
percentage ownership;                                                   

. incur debt and assume liabilities;                                        

. incur amortization expenses related to goodwill and other intangible      
assets; or                                                              

. incur large and immediate write-offs.                                     

These acquisitions also involve numerous risks, including:                

. problems integrating the purchased operations, products, technologies or  
services with its own;                                                  

. unanticipated costs and other liabilities;                                

. diversion of management's attention from its core business;               

. adverse effects on existing business relationships with suppliers and     
customers;                                                              

. risks associated with entering markets in which MAYAN has no or limited   
prior experience; and                                                   

. potential loss of key employees, particularly those of the acquired       
organizations.                                                          

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MAYAN may not be able to successfully integrate any businesses, products, 
technologies, services or personnel that it might acquire in the future.        
MAYAN's failure to do so could have an adverse effect on its ability to focus   
on its core business and its results of operations.                             

If MAYAN fails to manage its geographically diverse locations or its growth     
effectively, its business, financial condition and results of operations could  
be seriously harmed                                                             

MAYAN's ability to successfully offer its products and implement its      
business plan in a rapidly evolving market requires an effective planning and   
management process, as well as the implementation of appropriate control        
systems. Its operations currently are primarily conducted in three locations,   
Richardson, Texas, Phoenix, Arizona and San Jose, California. In the future,    
MAYAN may also conduct significant operations in other locations, including     
international locations. MAYAN may not be successful in managing operations in  
diverse locations or coordinating and integrating engineering and other efforts 
conducted in its various offices. MAYAN's failure to successfully manage        
operations in its various offices could delay its product development efforts,  
result in duplicative effort and expenses and consume substantial management    
time and attention. MAYAN expects that it will need to continue to improve its  
financial and managerial controls, reporting systems and procedures, and will   
need to continue to train and manage its workforce. MAYAN may not be able to    
install adequate control systems in an efficient and timely manner. Delays in   
the implementation of new systems, or operational disruptions when MAYAN        
transitions to new systems, would impair its ability to accurately forecast     
sales demand, manage its product inventory and record and report financial and  
management information on a timely and accurate basis, all of which would       
seriously harm its business.                                                    

If MAYAN does not substantially expand its customer service and support         
organization and its direct sales force, it will be unable to significantly     
increase product sales                                                          

Because MAYAN's products are complex, it must hire highly trained customer
service and support personnel. MAYAN currently has a small customer service and 
support organization and will need to increase its staff substantially to       
support the expanding needs of prospective customers, some of which could       
require significantly greater amounts of attention than it can provide. In      
particular, it is essential to its customers that its products do not result in 
network disruption. Hiring customer service and support personnel is extremely  
competitive in the telecommunications industry due to the limited number of     
people available with the necessary technical skills and understanding of       
optical networking. If MAYAN is unable to expand its customer service and       
support organization, it will be unable to significantly increase the sales of  
its products, which would impair its ability to grow its business.              

  In addition, if MAYAN is unable to expand its direct sales force, it may not
be able to increase market awareness and sales of its products, which may       
prevent it from achieving and maintaining profitability. MAYAN's products and   
services require a technical sales effort targeted at several key people within 
each of its prospective customers' organizations. Its sales efforts require the 
attention of sales personnel and specialized system engineers with extensive    
experience in optical networking technologies. Competition for these            
individuals is intense, and MAYAN may not be able to hire sufficient numbers of 
qualified sales personnel and specialized system engineers. Even if MAYAN is    
successful in expanding its sales force, it cannot assure you that it will be   
able to achieve or increase sales. If its sales force is unsuccessful, MAYAN    
will not achieve significant revenue growth, which would harm its business,     
financial condition and results of operations.                                  

If MAYAN loses key personnel or is unable to hire additional qualified          
personnel as necessary, its business may be harmed                              

MAYAN's success depends to a significant degree upon the continued        
contributions of its key management, engineering, sales and marketing, and      
finance personnel, many of whom would be difficult to replace, including Esmond 
T. Goei, its chief executive officer. MAYAN believes its future success will    
also depend in large part upon its ability to identify, attract and retain      
highly skilled managerial, engineering, sales and marketing and finance         
personnel. Competition for these individuals is intense in the                  
telecommunications                                                              

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industry, especially in the geographic areas in which MAYAN operates, and MAYAN 
may have difficulty hiring employees in the timeframe it desires, particularly  
qualified engineers and sales personnel. MAYAN may not succeed in identifying,  
attracting and retaining qualified personnel. Further, competitors, potential   
customers and other entities have attempted, and may in the future attempt, to  
recruit its employees. The loss of the services of any of its key personnel or  
the inability to identify, attract or retain qualified personnel in the future  
or delays in hiring qualified personnel, particularly engineers and sales       
personnel, could make it difficult for it to manage its business and meet key   
objectives, including timely product introductions, which would harm its        
business and operating results.                                                 

If MAYAN becomes subject to unfair hiring claims it could incur substantial     
defense costs and damages                                                       

Companies in the telecommunications industry whose employees accept       
positions with competitors frequently claim that their competitors have engaged 
in unfair hiring practices. MAYAN has received claims of this kind in the past  
and cannot assure you that it will not receive claims of this kind in the       
future as it seeks to hire qualified personnel or that those claims will not    
result in material litigation. These claims, regardless of their merits, could  
cause MAYAN to incur substantial defense costs and damages, could prevent it    
from hiring potential employees and could divert the attention of its           
management away from its operations, any of which could seriously harm its      
business.                                                                       

Termination or failure to continue a relationship with MAYAN's application      
service provider (ASP) may harm its business operations                         

  MAYAN currently engages a third party ASP for the management of its business
applications including finance, distribution, procurement, customer service,    
service contract and direct sales interfaces such as sales order management and 
systems configuration. MAYAN's ability to scale and grow depends in part on its 
ASP's ability to deploy, maintain and continue to develop an enterprise-class   
business system. Its business may be adversely affected if its ASP fails to     
perform, scale its platform to accommodate its growth or integrate critical     
business applications. MAYAN has spent significant amounts of resources on its  
ASP and intends to continue or increase development efforts in the future.      
Either party may terminate the relationship, or the relationship may not        
continue after the term of the current contract, which expires in 2003.         

It is possible that no patents will be issued from MAYAN's currently pending or 
future patent applications; any patents it receives may not provide it with any 
competitive advantages over, or may be challenged by, third parties             

 MAYAN believes its success will depend in large part on the strength of its
current and future patent position. Although MAYAN has filed three patent       
applications, its patent position is highly uncertain and involves complex      
legal and factual questions. Claims made under its patent applications may be   
denied or significantly narrowed, and patents issued to it may not provide      
significant commercial protection. Its patents may be challenged and they may   
not be confirmed valid if challenged. MAYAN could incur substantial costs in    
proceedings before the United States Patent Office, including interference      
proceedings. These proceedings could also result in adverse decisions as to the 
priority of its licensed or assigned inventions.                                

The steps MAYAN has taken to protect its intellectual property may be     
inadequate. Any of its patents, if issued, may be invalidated, circumvented or  
challenged. Competitors may develop equivalent or superior products or software 
or duplicate its products or software. In addition, effective patent,           
trademark, copyright and trade secret protection may not be available in some   
countries in which its products may be distributed.                             

MAYAN's business could be adversely affected if it is unable to protect its     
intellectual property rights from third-party challenges                        

MAYAN relies on a combination of patent, copyright, trademark and trade   
secret laws to protect its intellectual property rights. MAYAN also enters into 
confidentiality or license agreements with its employees,                       

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consultants and corporate partners, and control access to and distribution of   
its software, documentation and other proprietary information. Despite its      
efforts to protect its proprietary rights, unauthorized parties may attempt to  
copy or otherwise obtain and use its products or technology. Monitoring         
unauthorized use of its products is difficult and MAYAN cannot be certain that  
the steps it has taken or may take will prevent unauthorized use of its         
technology, particularly in foreign countries where the laws may not protect    
its proprietary rights as fully as in the United States, if at all. MAYAN's     
future success will depend in part on its ability to protect its proprietary    
rights and the technologies used in its principal products. If MAYAN is unable  
to enforce and protect its intellectual property, its business and its          
competitive position would be materially adversely affected.                    

Necessary licenses of third-party technology may not be available to MAYAN or   
may be very expensive                                                           

From time to time MAYAN may be required to license technology from third  
parties to develop new products or product enhancements. While MAYAN has been   
able to license third-party software to date, in the future third-party         
licenses may not be available to MAYAN on commercially reasonable terms or at   
all. The inability to obtain any third-party license required to develop new    
products and product enhancements could require MAYAN to obtain substitute      
technology of lower quality or performance standards or at greater cost, any of 
which could seriously harm its business or results of operations.               

MAYAN may not be able to raise additional capital to fund its future operations 

The development and marketing of new products and the expansion of its    
direct sales operation and associated support personnel is expected to require  
a significant commitment of resources. MAYAN intends to expand its sales and    
marketing activities and other operations faster than increases in actual or    
forecasted revenue. If MAYAN achieves its growth targets, its working capital   
needs will increase, so it may need to raise additional capital in order to     
fund expansion. MAYAN may also need additional capital in order to develop new  
services or products, or to acquire complementary businesses, products,         
technologies or services. Product development and acquisition activities are    
particularly capital-intensive in the telecommunications industry. MAYAN may    
incur significant operating losses and/or utilize significant amounts of        
capital if:                                                                     

. the market for its products develops more slowly than anticipated;        

. it fails to establish significant market share and realize significant    
revenues;                                                               

. it is required to finance its manufacturing on unfavorable terms;         

. its capital expenditure forecasts increase or prove inaccurate; or        

. it needs to respond to unforeseen challenges or take advantage of         
unanticipated opportunities.                                            

As a result, MAYAN may need to raise substantial additional capital. To the     
extent that it raises additional capital through the sale of equity or          
securities convertible into equity, the issuance of the securities could result 
in dilution to its existing shareholders. If additional funds are raised        
through the issuance of senior debt securities, these securities would have     
rights, preferences and privileges senior to holders of its convertible notes   
and its common stock. These securities could also have rights, preferences and  
privileges senior to the holders of other outstanding debt and the terms of     
that debt could impose restrictions on its operations. Additional capital, if   
required, may not be available on acceptable terms, or at all. If MAYAN is      
unable to obtain additional capital, it may be required to reduce the scope of  
its planned product development and marketing and sales efforts, which would    
harm its business and competitive position.                                     

MAYAN's officers and directors will continue to have substantial control over   
MAYAN and could delay or prevent a change in corporate control                  

 MAYAN's executive officers, directors and entities affiliated with them, in
the aggregate, beneficially own approximately 58.97% of its outstanding common  
stock as of March 31, 2001 and will own approximately 48%                       

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of the combined company after the merger. These shareholders, if acting         
together, would be able to influence significantly all matters requiring        
approval by its shareholders, including the election of directors and the       
approval of mergers or other changes in corporate control.                      

MAYAN faces risks associated with its potential international operations that   
could limit its sales and add to its cost of operations                         

MAYAN markets and sells its products in the United States and intends to  
market and sell its products internationally. This effort will require          
significant management attention and financial resources. MAYAN may not be able 
to develop international market demand for its products.                        

MAYAN has limited experience in marketing and distributing its products   
internationally. International operations are subject to inherent risks,        
including:                                                                      

. tariffs, export controls and other trade barriers;                        

. technology barriers and incompatibility problems;                         

. political and economic instability;                                       

. longer accounts receivable payment cycles and difficulties in the         
collection of accounts receivable;                                      

. currency devaluation due to the fact that MAYAN expects that its          
international customers will pay it in U.S. dollars and are therefore   
subject to foreign exchange rate risk which may inhibit their ability to
pay if their local currency is weak against the dollar;                 

. difficulties and costs of staffing and managing foreign operations;       

. unexpected changes in regulatory results and certification requirements   
with which it may be unfamiliar; and                                    

. reduced protection for intellectual property rights in some countries.    

Risks Related to MAYAN's Industry 

Uncertainties in telecommunications service providers' purchasing programs may  
affect MAYAN's future operating results                                         

Telecommunications service providers typically purchase network equipment 
pursuant to multi-year purchasing programs that may increase or decrease        
annually as the service providers adjust their capital equipment budgets and    
purchasing priorities. These uncertainties substantially complicate MAYAN's     
manufacturing planning and the ability to sell its products. In addition, MAYAN 
may commit to pricing and cost structures well in advance of commercial         
introduction of its systems. To the extent actual prices and costs are          
materially different from the estimates and commitments, MAYAN's margins and    
results of operations could be materially adversely affected. Its customers'    
curtailment or termination of purchasing programs, decreases in capital budgets 
or reduction in the purchasing priority assigned to equipment such as the       
Unifier SMX, particularly if significant and unanticipated, could materially    
and adversely affect MAYAN's revenues and business prospects.                   

If the market for broadband and other data communications services does not     
continue to expand, demand for MAYAN's products and services may decline        
significantly                                                                   

MAYAN's future success depends on the continued growth in the demand for  
broadband and other data communications services and the ability of its         
customers and prospective customers to sell those services. If this demand does 
not continue to grow as anticipated, the demand for its products could decline  
significantly, which would materially and adversely affect its revenues and     
business prospects.                                                             

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 The decline in the number of CLECS is also causing a decrease in the demand
for products in MAYAN's industry. Due to the fact that established large        
telecommunications service providers have longer, more established              
relationships with their current capital equipment suppliers, many equipment    
manufacturers in the industry, such as MAYAN, targeted CLECS as potential       
customers. However, many CLECS are having increasing difficulties surviving in  
the recent market environment and are consolidating or filing for bankruptcy    
and, as a result, the capital spending by CLECS has decreased from what was     
anticipated or has terminated altogether. This puts increasing pressure on      
MAYAN and its competitors to target these large telecommunications service      
providers in order to sell its products.                                        

MAYAN's product may become obsolete if it does not quickly meet emerging and    
evolving industry standards                                                     

MAYAN's success depends in part on its ability to incorporate new industry
standards and new technologies in its product. The market for fiber optic       
transmission equipment is characterized by several competing technologies that  
offer alternative solutions. If its product cannot support an adopted industry  
standard, potential customers may not choose MAYAN's product. As a result,      
MAYAN may incur significant losses due to lack of customer demand, excess       
inventory and diversion of its engineers from product development efforts.      

MAYAN's ability to anticipate changes in technology, industry standards,  
customer requirements and product offerings and to develop and introduce new    
and enhanced products will be significant factors in its ability to be a leader 
in the deployment of optical networking systems. Significant market acceptance  
of alternative transmission-enhancing equipment could prevent, delay or         
decrease the demand for its products under development if the alternatives are  
viewed as providing greater bandwidth, greater reliability, increased cost-     
effectiveness or other advantages over its products. An emerging industry trend 
is for products to be simpler and more efficient. The Unifier SMX is a complex  
product which incorporates many features. As a result, as a stand alone         
product, the Unifier SMX may not be able to meet market performance             
requirements. In addition, if the emerging trend continues, the Unifier SMX     
will be too complex and too expensive to effectively compete in MAYAN's         
industry. The rapid development of new competing technologies or the continued  
emergence of industry trends which MAYAN is unable to conform its products to   
increase the risk that current or new competitors could develop products and    
services that would reduce the competitiveness of its product, thereby reducing 
its revenues and harming its business.                                          

MAYAN could become subject to litigation regarding intellectual property rights 
which could seriously harm its business                                         

There are a large number of patents and frequent claims and related       
litigation regarding patent and other intellectual property rights in the       
telecommunications industry. In particular, many established companies in the   
telecommunications networking industry, including MAYAN's competitors, have     
extensive patent portfolios. From time to time, third parties may assert        
exclusive patent, copyright, trademark and other intellectual property rights   
to technologies and related standards that are important to MAYAN's business.   
Third parties may assert claims or initiate litigation against MAYAN or its     
manufacturer, suppliers or customers alleging infringement of their proprietary 
rights with respect to MAYAN's existing or future products or components of its 
products. Any of these claims and any resulting lawsuit, if successful, could   
subject MAYAN to significant liability for damages or hinder or prevent the     
manufacture, sale and use of its products. These lawsuits, regardless of their  
success, would likely be time-consuming and expensive to resolve and would      
divert management time and attention. Any potential intellectual property       
litigation also could force MAYAN to do one or more of the following:           

. stop selling or using its products that use the challenged intellectual   
property;                                                               

. obtain from the owner of the infringed intellectual property right a      
license to sell or use the relevant technology, which license may not be
available on reasonable terms, or at all; or                            

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. redesign those products that use that technology.                         

If MAYAN is forced to take any of these actions, its business may be      
seriously harmed. Although MAYAN carries general liability insurance, its       
insurance may not cover potential claims of this type or may not be adequate to 
indemnify it for all liability that may be imposed.                             

The telecommunications industry is subject to government regulations which      
could harm MAYAN's business                                                     

The Federal Communications Commission, or FCC, has jurisdiction over the  
entire telecommunications industry and, as a result, MAYAN's products, and      
those of its customers, are subject to FCC rules and regulations. Current and   
future FCC rules and regulations affecting communications services, MAYAN's     
products or its customers' businesses or products could negatively affect its   
business. In addition, international regulatory standards could impair its      
ability to develop products for international carriers in the future. Delays    
caused by MAYAN's compliance with regulatory requirements could result in       
postponements or cancellations of product orders, which would harm its business 
and increase its costs. Further, MAYAN cannot be certain that it will be        
successful in obtaining or maintaining any regulatory approvals that may, in    
the future, be required to operate its business.                                

The regulatory environment for the telecommunications industry has        
historically been subject to significant changes as a result of political,      
economic and technical factors. Those regulatory processes, including the       
direct regulation of its potential products, could significantly impact MAYAN's 
operations by restricting its development efforts and those of its prospective  
customers, making its potential products obsolete or increasing the opportunity 
for additional competition. MAYAN might deem it necessary or advisable to       
modify its products to operate in compliance with these regulations. These      
modifications could be expensive and time consuming and delay product           
introduction.                                                                   

Risks Related to Ariel

Ariel has incurred substantial operating losses and an accumulated deficit. It  
expects to continue to have operating losses and a growing accumulated deficit  
in the future                                                                   

 Ariel's business operations have generated operating losses since 1993. For
the year ended December 31, 2000, its business operations generated operating   
losses of $16,129,132. For the three months ended March 31, 2001, its business  
operations generated operating losses of $3,834,232. It had an accumulated      
deficit of $45,634,578 at March 31, 2001. Ariel expects to continue to generate 
net operating losses while it continues to launch new products and penetrate    
the ISP market. Ariel can give no assurance that it will obtain a customer base 
sufficient to support the costs of its operations.                              

Absent this merger, Ariel has very limited, if any, financial resources   
available to support its ongoing operations, fund product development programs  
to develop and market new competitive remote access technology and pay its      
obligations as they become due.                                                 

  These factors raise substantial doubt concerning Ariel's ability to continue
as a going concern. Ariel's ability to continue as a going concern is dependent 
upon the consummation of the merger, the ongoing support of its stockholders,   
creditors, and key customers, and/or its ability to successfully develop and    
market its remote access products and technology at economically feasible       
levels in a highly competitive and rapidly changing technology environment.     

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Ariel has debt and debt service requirements and this may adversely affect its  
financial and operating flexibility                                             

  Ariel has a significant amount of indebtedness. At March 31, 2001, Ariel had
$1,653,048 million of outstanding indebtedness under its credit agreement with  
Transamerica and $2,000,000 under a promissory note to MAYAN at May 21, 2001.   

The amount of indebtedness Ariel has could have important consequences to 
its stockholders. For example, it could:                                        

. make it more difficult for it to meet its obligations;                    

. increase its vulnerability and limit its ability to react to general      
adverse economic and industry conditions;                               

. limit its ability to use operating cash flow to fund operating expenses,  
working capital, research and development and other general corporate   
purposes because Ariel must dedicate a substantial portion of its cash  
flow to make payments on its debt;                                      

. place Ariel at a competitive disadvantage compared to some of its         
competitors that have less debt; and                                    

. limit its ability to borrow additional funds.                             

Ariel's ability to pay interest under its credit agreement or to refinance
its indebtedness and to satisfy its other debt obligations will depend upon its 
future operating performance, which in turn depends upon the successful         
implementation of its new business strategy and upon financial, competitive,    
regulatory, technical and other factors, many of which are beyond its control.  

If Ariel is not able to generate sufficient cash from operations to make  
payments under its credit agreement or to meet any other debt service           
obligations, it will need to refinance its indebtedness. If that refinancing is 
not possible, Ariel could be forced to dispose of assets at unfavorable prices  
or default on its debt obligations. Even if it obtains new financing, Ariel     
cannot assure you that it would be on terms that are favorable to Ariel.        

Ariel has recently changed its business strategy to focus on a new class of     
products for the ISP market. This represents a new market for Ariel and it has  
had limited experience selling its products in this market                      

Ariel's ability to successfully execute its new business strategy is      
critical to the future performance of its business. During the second quarter   
of 1999, Ariel changed its business strategy to focus on the ISP market         
following the decline of the enterprise remote access market. Historically,     
Ariel has derived, and expects to continue to derive in the near term,          
substantially all of its revenues from product sales to OEMs and PC             
manufacturers. As it focuses its efforts on the ISP market, Ariel expects sales 
to OEMs to represent a declining percentage of its total revenue in the future  
if its new business strategy is successful. Because the ISP market is a new     
market for Ariel and the equipment it has developed for that market has only    
recently been introduced, it has had limited experience in selling its          
products. Currently, approximately 150 ISPs have purchased its products.        

Successful execution of Ariel's new business strategy will depend on its  
ability to:                                                                     

. penetrate the ISP market;                                                 

. achieve market acceptance of its products;                                

. successfully develop and introduce new products;                          

. identify, recruit and retain qualified engineers and sales personnel;     

. provide adequate customer care and technical support;                     

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. manage its growth; and                                                    

. secure adequate financing.                                                

Ariel cannot assure you that it will be successful in executing its new   
business strategy, and if it is not, its business, financial condition and      
results of operations could be adversely affected and the price of its common   
stock will likely decline.                                                      

Ariel's PowerPOP architecture is new and may not be accepted by its target      
market                                                                          

The market success of Ariel's ISP products depends significantly upon the 
acceptance of its PowerPOP architecture by the small to mid-sized ISPs it is    
targeting. The PowerPOP architecture represents a different approach to         
addressing ISP remote access equipment needs. Ariel's approach uses a standard  
PC system running Windows NT or Linux to build remote access server             
concentrators, in contrast to traditional products that are custom-built for    
this purpose. ISPs may not be willing to use Ariel's approach which would       
significantly hinder Ariel's growth potential and would negatively affect its   
business.                                                                       

Ariel's OEM customers comprise a majority of its sales and are concentrated     
among a small number of customers                                               

Ariel's sales are concentrated among a small number of OEM customers. For 
the year ended December 31, 2000, approximately 83% of its revenue was          
generated by OEM customers with three of those customers accounting for 38% of  
its revenue. The loss of any of these customers would negatively impact Ariel's 
revenues. Until Ariel is able to penetrate the ISP market, it expects that a    
small number of OEM customers will continue to account for a substantial        
portion of its revenue.                                                         

Ariel has discontinued certain products and anticipate no future revenues from  
these products                                                                  

In June 2000, Ariel notified its customers that it would no longer offer  
certain older digital signal processing, or DSP, products due to the lack of    
availability of component parts and the prohibitive cost of production, testing 
and technical support for these older products. Therefore, these products are   
no longer generally available after December 31, 2000 and Ariel anticipates no  
future revenues from these products.                                            

In June 2000 Ariel made a decision to phase out low-end basic rate ISDN   
(BRI) products of its European subsidiary, SCii. The decision was based on      
reduced sales of BRI products due to the loss of major customers and advances   
in competing technologies. Accordingly, Ariel anticipates no future revenues    
from sale of BRI products. In the twelve months ending December 31, 2000 older  
DSP and BRI products accounted for approximately 89% of its sales.              

If Ariel fails to establish and maintain strategic distribution, marketing or   
other collaborative relationships with industry-leading companies, it may not   
be able to build its ISP customer base                                          

  Ariel's success depends on its ability to continue to establish and maintain
strategic distribution, marketing and other collaborative relationships with    
industry-leading hardware manufacturers, distributors, software vendors and     
enterprise solutions providers. These relationships allow Ariel to offer its    
products and services to a much larger customer base than it would otherwise be 
able to through its direct sales and marketing efforts. Most of its existing    
relationships can be terminated on short notice by any party. Ariel cannot      
assure you that it will be able to maintain these relationships or replace them 
on attractive terms.                                                            

  In addition, Ariel's existing strategic relationships do not, and any future
strategic relationships may not, afford it any exclusive marketing or           
distribution rights. As a result, the companies with which Ariel has strategic  
relationships are free to pursue alternative technologies and to develop        
alternative products and services in addition to or in lieu of Ariel's products 
and services, either on their own or in collaboration with others, including    
Ariel's competitors. Moreover, Ariel cannot guarantee that the companies with   
which it has                                                                    

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strategic relationships will distribute its products effectively or continue to 
devote the resources necessary to provide it with effective sales, marketing    
and distribution.                                                               

If there is unexpected fluctuation in demand for its products, Ariel may incur  
inventory write-downs, excessive operating costs or lose product revenues       

  Ariel must forecast and place purchase orders for components of its products
several months before it receives purchase orders from its own customers. This  
forecasting and order lead time requirements limit its ability to react to      
unexpected fluctuations in demand for its products. These fluctuations can be   
unexpected and may cause Ariel to have excess inventory, or a shortage, of a    
particular product. In the event that Ariel's forecasts are inaccurate, it may  
need to write down excess inventory. For example, Ariel was required to write   
down inventory in the fourth quarter of 1998 in connection with the termination 
of its sales to Compaq and a reduction in sales to other OEM customers.         
Significant write-downs of excess inventory or declines in inventory value in   
the future could adversely affect Ariel's financial results. Similarly, if      
Ariel fails to purchase sufficient supplies on a timely basis, it may incur     
additional rush charges or it may lose product revenues if it is not able to    
meet a purchase order. These failures could also adversely affect its customer  
relations.                                                                      

Undetected errors or defects found in Ariel's products may result in loss of    
customers or delay in market acceptance of its products                         

Despite testing by Ariel and by its customers, errors may be found in new 
products after commencement of commercial shipments resulting in loss of        
customers, delay in market acceptance of its products and damage to its         
reputation. In addition, if errors are discovered, Ariel may have to spend a    
significant amount of money to eliminate them and yet may not be able to        
successfully correct them in a timely manner, or at all.                        

Failures in Ariel's products may also cause system failures for its       
customers who could then assert warranty and other claims for damages against   
Ariel. Although Ariel's customer agreements typically contain provisions        
designed to limit its exposure to potential product liability' claims, it is    
possible that these provisions may not be effective or enforceable under the    
laws of some jurisdictions. Ariel's insurance policies may not adequately limit 
its exposure to this type of claim. These claims, even if unsuccessful, could   
be costly and time consuming to defend and could divert management's attention  
from Ariel's business. Ariel cannot assure you that the occurrence of any of    
these events would not have a material adverse effect on its business,          
financial condition and results of operations.                                  

Average selling prices of Ariel's products may decrease which could hurt its    
operating results                                                               

The average selling prices for Ariel's products may be lower than expected
as a result of competitive pricing pressures, technological advances,           
promotional programs and customers who negotiate price reductions. The pricing  
of products depends on the specific features and functions of the product, the  
extent to which the product can be integrated within ISPs' and OEMs' existing   
hardware and software operating systems, purchase volumes and the level of      
sales and service support. Historically, the trend in Ariel's industry has been 
for prices to decrease as technological innovations become widespread. Ariel    
expects this trend and price competition to continue and possibly increase in   
the future, both in the OEM and the ISP remote access equipment markets, and    
anticipates that the average selling prices of its current products will        
decrease. Ariel cannot assure you that it will be successful in developing and  
introducing on a timely basis new products with enhanced features that can be   
sold at its projected selling prices.                                           

Ariel depends on a limited number of third-party suppliers some of which are    
the sole suppliers of the product Ariel purchases from them                     

  Ariel purchases digital signal processing chips and certain other components
from Texas Instruments, Conexant Systems, Lucent Technologies and Analog        
Devices, each of which manufactures and is the sole supplier of the digital     
signal processing chips upon which Ariel's products have been developed. Ariel  
does not                                                                        

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have long-term agreements with any of these suppliers. Any reduction or         
interruption in supply or manufacturing from these third party contractors      
would adversely affect Ariel's ability to continue to deliver its products.     
Ariel also depends upon development, supply, marketing, licensing and other     
relationships with third parties for complementary technologies incorporated in 
its products. These cooperative relationships, many of which have been in place 
for a number of years, are with hardware and software developers pursuant to    
which each company makes available its technology to the other for the purpose  
of achieving compatible products. Some of these relationships are based upon    
annually renewable license agreements under which Ariel obtains technology      
necessary to produce its products. These relationships are generally non-       
exclusive and terminable, in some cases on short notice or at any time, and     
there can be no assurance that Ariel will be able to maintain these             
relationships or to initiate similar additional relationships. The loss of      
certain cooperative relationships, particularly with any of the digital signal  
processing chip suppliers, may have a material adverse effect on Ariel's        
business.                                                                       

The market for remote access equipment is highly competitive and Ariel competes 
with large, well established companies. If Ariel is unable to compete           
effectively, the demand for, or prices of, its products may be reduced          

The remote access equipment market is intensely competitive. Ariel may not
be able to compete successfully against current or potential competitors and    
its failure to do so could seriously harm its business, operating results and   
financial condition.                                                            

In the ISP market, Ariel competes directly with other small companies that
sell remote access equipment as well as large well-established companies such   
as Ascend/Lucent, Cisco, and 3Com. These and many of Ariel's current and        
potential competitors have significantly greater financial, selling and         
marketing, technical, manufacturing and other resources than Ariel has. As a    
result, these competitors may be able to devote greater resources toward the    
development, promotion, sale and support of their products than Ariel can.      
These companies may introduce additional products that compete with Ariel's     
products or enter into strategic relationships to offer complete solutions      
which Ariel currently does not offer.                                           

In addition, Ariel recently introduced its PowerPOP architecture to the   
market and it has not had enough experience selling the product to fully assess 
its competitiveness. If Ariel finds that its new products are not competitive,  
its business could be materially harmed.                                        

Ariel's financial results may fluctuate from period to period as a result of    
several factors which could adversely affect its stock price                    

 Because of the change in Ariel's business strategy, the loss of a major OEM
customer, the sale of its communications systems group and other factors, Ariel 
believes that period to period comparisons of its operating results may not be  
a good indication of its future performance. It is possible that in some future 
periods Ariel's operating results may be below the expectations of public       
market analysts and investors. In this event, the price of Ariel's common stock 
may fall. In the past, Ariel has experienced fluctuations in its revenue and    
operating results and its revenue and operating results may continue to vary    
significantly from period to period due to a number of factors, many of which   
are beyond its control. These factors include:                                  

. fluctuations in demand for its products and services;                     

. variations in the timing of orders and shipments of its products;         

. the timing of new product and service introductions by Ariel or its       
competitors;                                                            

. the mix of products sold and the mix of distribution channels through     
which they are sold;                                                    

. its ability to obtain sufficient supplies of sole or limited sourced      
components for its products;                                            

. unfavorable changes in the prices of the components Ariel purchases;      

. its ability to achieve cost reductions;                                   

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. its ability to maintain quality levels for its products;                  

. its ability to integrate new technologies Ariel develops or acquire into  
its products; and                                                       

. timing of acquisitions and dispositions of businesses and assets.         

 The amount and timing of Ariel's operating results generally will vary from
quarter to quarter depending on the level of actual and anticipated business    
activities and as Ariel develops and launches new products. Ariel has           
experienced sharply increased revenue in periods that involved new product      
introductions and significant sales to OEMs, with equally sharp decreases in    
revenue in subsequent periods as distributors and OEMs complete their inventory 
build-up process. Furthermore, Ariel has a limited backlog of orders and        
revenue for any future quarter is difficult to predict. Supply, manufacturing   
or testing constraints could result in delays in the delivery of Ariel's        
products. Any delay in the product deployment schedule of one or more of        
Ariel's new products would likely adversely affect its operating results for a  
particular period.                                                              

Ariel's technology is not patented and it will not be protected by patent laws  

Ariel believes that its success is dependent upon its proprietary         
technology. However, since Ariel has not in the past actively pursued patent    
protection on most of its products and does not hold patents on many of its     
current products, it will not be protected by patent laws in the event          
competitors are able to create substantially similar or duplicate products.     
Ariel principally relies upon copyright, trade secret and contract law to       
protect its proprietary technology. Ariel cannot assure you that it will be     
able to prevent misappropriation of its technology or that its competitors will 
not independently develop technologies that are substantially equivalent or     
superior to its technology.                                                     

Intellectual property claims against Ariel could be costly and result in the    
loss of significant rights                                                      

  The telecommunications industry is characterized by the existence of a large
number of patents and frequent litigation based on allegations of patent        
infringement or other violations of intellectual property rights. Patent,       
trademark and other intellectual property rights are important to Ariel and     
other technology companies. Many companies devote significant resources to      
developing patents that could affect many aspects of Ariel's business. Other    
parties may assert infringement or unfair competition claims against Ariel that 
could relate to any aspect of its technologies or other intellectual property.  
Ariel may also be subject to claims relating to components it purchases from    
its suppliers and integrates into its products. Ariel cannot predict whether    
third parties will assert claims of infringement against it, the subject matter 
of any of these claims or whether these assertions or prosecutions will harm    
its business. If Ariel is forced to defend itself against any of these claims   
whether they are with or without merit or are determined in its favor, it may   
face costly litigation, diversion of technical and management personnel an      
inability to use its current technology or product shipment delays. As a result 
of a dispute, Ariel may have to develop non-infringing technology or enter into 
royalty or licensing agreements. These royalty or licensing agreements, if      
required, may be unavailable on terms acceptable to Ariel, or at all. If there  
is a successful claim of patent infringement against Ariel and it is unable to  
develop non-infringing technology or license the infringed or similar           
technology on a timely basis, Ariel's business and competitive position may be  
adversely affected.                                                             

Ariel does not have its own manufacturing facilities and it depends on a        
limited number of outside companies to manufacture substantially all the        
equipment it sells                                                              

Ariel does not have its own manufacturing facilities and relies on K-     
Byte/Hibbing Manufacturing and JRE Inc. in the United States to manufacture     
substantially all of its equipment. These agreements can be terminated on short 
notice by any party. Ariel cannot assure you that it will be able to maintain   
these relationships or replace them on attractive terms. There are risks        
associated with its relationship with these third parties, including reduced    
control over:                                                                   

. delivery schedules;                                                       

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. quality assurance;                                                        

. manufacturing costs;                                                      

. capacity during periods of excess demand; and                             

. availability of access to process technologies.                           

Ariel depends on its key personnel and it may be unable to replace key          
executives if they leave. Ariel's failure to attract, assimilate and retain     
other highly qualified personnel in the future could seriously harm its         
business                                                                        

Ariel's success is largely dependent upon the personal efforts of its     
executive officers as well as other key personnel and its future success is     
also dependent on its ability to recruit and retain additional experienced      
engineering and sales personnel. Ariel intends to appoint additional senior     
management personnel as well as to hire additional engineering, sales and       
support personnel in the future. Competition for personnel, especially          
engineers and sales personnel, in New Jersey is intense. There can be no        
assurance that Ariel will be able to retain or hire other necessary personnel.  
Loss of the services of, or failure to recruit, key personnel could materially  
harm its business.                                                              

Ariel's management team may not be able to successfully implement its business  
strategy because it has only recently begun to work together                    

Ariel's business is highly dependent on the ability of its management to  
work together effectively to execute its business strategy. Several members of  
its senior management have been employed by Ariel for a relatively short period 
of time and Ariel is in the process of recruiting additional senior management. 
These individuals have not previously worked together as a management team. In  
addition, the members of Ariel's management team who have been with Ariel for a 
longer period have had only limited experience within its new target markets.   
The failure of Ariel's management team to work together effectively could       
prevent efficient decision making by Ariel's executive team, affecting product  
development and sales and marketing efforts, which would negatively impact      
Ariel's results of operations.                                                  

Risks Relating to Ariel's Industry

Ariel must keep pace with rapid technological change to remain competitive      

  The telecommunications industry is subject to rapid technological change and
frequent new product introductions and enhancements, particularly in the area   
of equipment for remote access and related network services. Ariel believes     
that its success will depend upon its ability to continuously develop new       
products and product enhancements as well as provide quality technical support  
services and be in a position to promptly introduce its products and services   
to the market. Ariel may experience difficulties that could delay or prevent    
the successful development, introduction or marketing of new products and       
enhancements, or its new products and enhancements may not adequately meet the  
requirements of the marketplace and achieve market acceptance. Announcements of 
currently planned or other new product offerings by Ariel or its competitors    
may cause customers to defer or cancel the purchase of its existing products.   
Ariel's inability to develop on a timely basis new products or enhancements to  
existing products, or the failure of its new products or enhancements to        
achieve market acceptance, could have a material adverse effect on its          
business, financial condition and results of operations.                        

The development of new, technologically advanced products is a complex and
uncertain process requiring the accurate anticipation of technological and      
market trends. The introduction of new or enhanced products also requires Ariel 
to manage the transition from older products in order to minimize disruption in 
customer ordering patterns, avoid excessive levels of older product inventories 
and ensure that adequate supplies of new products can be delivered to meet      
anticipated customer demand. Ariel cannot assure you that it will be able to    
successfully develop, introduce or manage the transition to new products.       

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There can also be no assurance that Ariel's competitors will not develop  
future generations of competitive products that will offer superior price,      
features or performance advantages which would render its products              
uncompetitive. There are currently competing technologies that offer            
alternative solutions which allow for faster Internet access compared to dial-  
up access. These competing technologies include digital subscriber line,        
wireless and cable. Ariel cannot assure you that, in order to remain            
competitive, it will be successful in developing and introducing on a timely    
basis new products and technologies.                                            

Ariel's success in the ISP market depends on the continued growth and use of    
Internet and dial-up access technologies                                        

Demand for Ariel's ISP remote access solutions is being driven by the     
increase in the use of the Internet. Ariel's future performance depends         
substantially upon the continued widespread acceptance and use of the Internet  
and other online services. Rapid growth in the use of the Internet and other    
online services is a relatively recent phenomenon, and Ariel cannot assure you  
that acceptance and use will continue to develop or that a sufficiently broad   
base of consumers will adopt, and continue to use, the Internet and other       
online services as a medium of communication and commerce. The emergence of     
alternative technologies may substantially reduce its potential markets. If     
dial-up access technologies become obsolete, Ariel would have to develop and    
market new products in order to continue its operations. Ariel cannot be        
certain that it will succeed in adapting its product strategies to compete      
effectively with these alternative technologies.                                

Ariel's customers are subject to government regulations and changes in these    
laws or regulations could negatively affect its ability to develop new          
technologies or sell new products                                               

The jurisdiction of the Federal Communications Commission extends to the  
entire communications industry, including Ariel's customers and their products  
and services that incorporate its products. For example, FCC regulatory         
policies that affect the availability of data and Internet services may impede  
its customers' penetration into their markets or affect the prices that they    
are able to charge. In addition, international regulatory bodies are beginning  
to adopt standards for the communications industry. Although Ariel's business   
has not been affected by regulations to date, in the future, delays caused by   
its compliance with regulatory requirements, in particular telecommunication    
tariffs regulations, may result in order cancellations or postponements of      
product purchases by its customers, which would harm its business.              

Risks Related to the Exchange Offer 

MAYAN, or Ariel following the closing of the merger, may not have the financial 
resources to repurchase the exchange notes in the event of a repurchase event   

Upon a repurchase event, the holders of the exchange notes may require    
MAYAN, or Ariel following the closing of the merger, to repurchase all or a     
portion of the exchange notes. A repurchase event is (i) the occurrence of a    
change of control as defined in the exchange notes indenture or (ii) after the  
merger (or alternative mergers or public equity offerings), delisting of the    
common stock into which the exchange notes are convertible. If a repurchase     
event were to occur, MAYAN or Ariel may not have enough funds to pay the        
repurchase price for all exchange notes and therefore may be unable to          
repurchase the exchange notes. In addition, any future credit agreements or     
other debt agreements may contain similar provisions, or expressly prohibit the 
repurchase of the exchange notes upon a repurchase event or may provide that a  
repurchase event constitutes an event of default under that agreement. If a     
repurchase event occurs at a time when MAYAN or Ariel is prohibited from        
repurchasing the exchange notes, it could seek the consent of its lenders to    
repurchase the exchange notes or could attempt to refinance its debt            
agreements. If it does not obtain consent, MAYAN or Ariel could not repurchase  
the exchange notes. MAYAN's or Ariel's failure to repurchase the exchange notes 
would constitute an event of default under the exchange notes indenture, which  
might constitute an event of default under the terms of its other debt. MAYAN   
expects that it would require third-party financing to satisfy these            
obligations, and it can provide no assurance that it would be able to obtain    
financing on favorable terms, if at all.                                        

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MAYAN's (or Ariel's following the merger) substantial leverage as a result of   
the issuance of the exchange notes and the existing notes and the covenants in  
the exchange notes indenture could harm its ability to finance future           
operations                                                                      

  Even if the exchange offer results in all the existing notes being exchanged
for the exchange notes, thereby reducing MAYAN's subordinated indebtedness from 
$75.0 million to $50.0 million, MAYAN (or Ariel following the merger) will      
continue to be highly leveraged after giving effect to the exchange offer. The  
degree to which MAYAN (or Ariel following the merger) is leveraged could have   
important consequences for shareholders and holders of the exchange notes,      
including, but not limited to, the:                                             

. limitation on MAYAN's or Ariel's ability to refinance its existing        
indebtedness or obtain additional financing to fund interest payments,  
note repurchases, future working capital, capital expenditures, or other
general corporate purposes;                                             

. requirement that its cash flow from operations to pay the principal of,   
and interest on, the exchange notes, thereby reducing its projected cash
flow to fund working capital, capital expenditures or other general     
corporate purposes;                                                     

. limitation on its flexibility in planning for, or reacting to, changes in 
the business and the telecommunications industry, including the pursuit 
of its growth strategy;                                                 

. limitation on its ability to withstand adverse economic conditions or     
take advantage of significant business opportunities that may arise;    

. limitation on its ability to compete with, and placing it at a            
disadvantage to, competitors who are not as highly leveraged;           

. limitation on its ability to invest in new or developing technologies;    
and                                                                     

. limitation on its ability to respond to changes affecting the             
implementation of its financing, development or operating plans.        

MAYAN's or Ariel's ability to pay interest on the exchange notes and to   
satisfy its other debt obligations will depend upon its future operating        
performance. Prevailing economic conditions and financial, business and other   
factors, many of which are beyond its control, will affect its ability to make  
these payments. If, in the future, MAYAN or Ariel cannot generate sufficient    
cash flow from operations to make scheduled payments on the exchange notes or   
to meet its other obligations, it will need to refinance its indebtedness,      
obtain additional financing or sell assets. MAYAN or Ariel cannot be certain    
that its business will generate cash flow, or that it will be able to obtain    
funding sufficient to satisfy its debt service requirements.                    

MAYAN's debt instruments contain covenants that may limit its operating         
flexibility                                                                     

The documents governing MAYAN's indebtedness, including its exchange notes
indenture and the existing notes indenture, contain significant covenants that  
may limit MAYAN's ability to engage in various transactions. The limitations    
imposed by the documents governing MAYAN's outstanding indebtedness are         
substantial, and if MAYAN fails to comply with such limitations, MAYAN's debts  
could become immediately payable at a time when it is unable to pay them.       

The restrictions in the existing notes indenture and the exchange notes   
indenture may limit MAYAN's or Ariel's financial and operating flexibility. In  
addition, if MAYAN fails to comply with the restrictions contained in the       
existing notes indenture and the exchange notes indenture, the holders of the   
existing notes and exchange notes may accelerate payments under the existing    
notes and exchange notes, which in turn may allow existing as well as future    
creditors to accelerate payment of their debt. If any debt payment was          
accelerated, there can be no assurance that MAYAN's assets would be sufficient  
to repay its debt in full its debt, including the exchange notes.               

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ARIEL SPECIAL MEETING 

General                                                                         

Ariel is furnishing this document to holders of Ariel common stock in     
connection with the solicitation of proxies by Ariel's board of directors for   
use at the special meeting of stockholders of Ariel to be held on         ,     
2001, and any adjournment or postponement of that meeting.                      

Date, Time and Place                                                            

The special meeting will be held on             , 2001, beginning at [ : ]
a.m., local time, at                                                      .     

Matters to be Considered at the Special Meeting                                 

At the special meeting and any adjournment or postponement of the special 
meeting, Ariel stockholders will be asked:                                      

. to consider and vote upon the approval of the merger agreement;           

. to approve an amendment to Ariel's certificate of incorporation to        
increase the number of authorized shares of common stock from           
shares to        shares, after giving effect to the one for     reverse 
 stock split which is expected to occur immediately prior to the effective
time of the merger;                                                     

. to approve the one for    reverse stock split of the common stock of      
Ariel, to be effective immediately prior to the effective time of the   
merger;                                                                 

. to approve the implementation of the 2001 Stock Incentive Plan under      
which     shares of Ariel common stock will initially be reserved for   
issuance;                                                               

. elect Ariel's current board of directors to serve until the earlier of    
(i) the closing of the merger or (ii) until their successors are duly   
elected and qualified; and                                              

. to transact any other business as may properly come before the special    
meeting.                                                                

Record Date                                                                     

Ariel's board has fixed the close of business on           , 2001, as the 
record date for determination of Ariel stockholders entitled to notice of and   
to vote at the special meeting.                                                 

Voting of Proxies                                                               

Ariel requests that its stockholders complete, date and sign the          
accompanying proxy and promptly return it in the accompanying envelope or       
otherwise mail it to Ariel, or otherwise provide their proxy by telephone or    
the Internet. Brokers holding shares in "street name" may vote the shares only  
if the stockholder provides instructions on how to vote. Brokers will provide   
directions on how to instruct the broker to vote the shares. All properly       
executed proxies that Ariel receives prior to the vote at the special meeting,  
and that are not revoked, will be voted in accordance with the instructions     
indicated on the proxies or, if no direction is indicated, to approve the       
merger agreement, the merger, the amendments to Ariel's certificate of          
incorporation, the implementation of the 2001 Stock Incentive Plan, the         
election of Ariel's current board of directors and the related transactions.    
Ariel's board does not currently intend to bring any other business before the  
special meeting and, so far as Ariel's board knows, no other matters are to be  
brought before the special meeting. If other business properly comes before the 
special meeting, the proxies will vote in accordance with their own judgment.   

Stockholders may revoke their proxies at any time prior to its use        

. by delivering to the secretary of Ariel a signed notice of revocation or  
a later-dated, signed proxy; or                                         

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. by attending the special meeting and voting in person.                    

Attendance at the special meeting does not in itself constitute the       
revocation of a proxy.                                                          

Votes Required                                                                  

As of the close of business on the record date, there were                
shares of Ariel common stock outstanding and entitled to vote, after giving     
effect to the one for     reverse stock split which is expected to occur        
immediately prior to the effective time of the merger. The affirmative vote of  
the holders of a majority of the shares of Ariel common stock outstanding and   
entitled to vote at the Ariel meeting is required for approval of the merger    
agreement and for the amendment to the certificate of incorporation. The        
holders of a majority of the shares of Ariel common stock that are present in   
person or represented by proxy must approve the 2001 Stock Incentive Plan and a 
plurality of the votes cast in person or by proxy by the holders of the shares  
of Ariel common stock is required to elect directors. Ariel stockholders have   
one vote per share of Ariel common stock owned on the record date.              

As of the record date, directors and executive officers of Ariel and their
affiliates owned        shares of Ariel common stock, after giving effect to    
the one for     reverse stock split which is expected to occur immediately      
prior to the effective time of the merger, or approximately     % of the shares 
of Ariel common stock outstanding on that date. Ariel's directors and executive 
officers, and their affiliates, have indicated their intention to vote all of   
their shares of Ariel common stock in favor of each of the proposals at the     
Ariel special meeting. Pursuant to voting agreements entered into concurrent    
with the merger agreement, Ariel stockholders owning approximately     % of     
Ariel's common stock outstanding as of the record date have agreed to vote all  
of their shares of Ariel common stock for:                                      

. approval of the merger agreement;                                         

. approval of the increase in the authorized shares of Ariel;               

. approval of the one for    reverse stock split; and                       

. approval of the implementation of the 2001 Stock Incentive Plan.          

As of March 28, 2001, directors and executive officers of MAYAN owned     
shares of Ariel common stock, after giving effect to the one for     reverse    
stock split, and had the right to purchase an additional      shares of Ariel   
common stock, after giving effect to the one for     reverse stock split,       
pursuant to outstanding stock options.                                          

Quorum; Abstentions and Broker Non-Votes                                        

 The required quorum for the transaction of business at a special meeting is
the presence, in person or by proxy, of a majority of the shares of Ariel       
common stock outstanding and eligible to vote as of the record date.            
Abstentions and broker non-votes each will be included in determining the       
number of shares present and voting at the meeting for the purpose of           
determining the presence of a quorum. Brokers holding shares for beneficial     
owners cannot vote on the actions proposed in this document without the owners' 
specific instructions. Accordingly, Ariel stockholders are urged to return the  
enclosed proxy card marked to indicate their vote. Broker non-votes and         
abstentions will not be included in vote totals and will have the effect of a   
vote against each of the proposals at the Ariel special meeting.                

Solicitation of Proxies and Expenses                                            

Ariel has retained the services of CIC Georgeson Shareholder Services to  
assist in the solicitation of proxies from Ariel stockholders. The fees to be   
paid to the firm by Ariel for those services are not expected to exceed $8,000  
plus reasonable out-of-pocket expenses. Ariel and MAYAN will each bear its own  
expenses in connection with the solicitation of proxies for its special meeting 
of stockholders and shareholders, except that each will pay one-half of all     
printing and mailing costs and expenses incurred in connection with the         
registration statement and this document.                                       

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In addition to solicitation by mail, the directors, officers and employees
of Ariel may solicit proxies from Ariel stockholders by telephone, email,       
facsimile or in person, but they will not receive any compensation for those    
services. Brokerage houses, nominees, fiduciaries and other custodians will be  
requested to forward soliciting materials to beneficial owners and will be      
reimbursed for their reasonable expenses incurred in sending proxy materials to 
beneficial owners.                                                              

Board Recommendations                                                           

The disinterested members of Ariel's board have determined that the merger
agreement and the merger are fair to, and in the best interests of, Ariel and   
its stockholders. Accordingly, the disinterested members of the board           
unanimously have approved the merger agreement and unanimously recommend that   
Ariel stockholders vote "FOR" approval of the merger agreement. In considering  
that recommendation, Ariel stockholders should be aware that some Ariel         
officers and key employees have interests in the merger that are different      
from, or in addition to, those of Ariel's stockholders. See "The Merger--       
Interests of Ariel's Management in the Merger and Potential Conflict of         
Interest."                                                                      

The disinterested members of the Ariel board also have determined that:   

. increasing the number of Ariel's authorized shares of common stock from   
    to        , after giving effect to the one for     reverse stock
split which is expected to occur immediately prior to the effective time
of the merger;                                                          

. effecting a one for    reverse stock split of Ariel's common stock, to be 
effective immediately prior to the effective time of the merger; and    

. approving the implementation of the 2001 Stock Incentive Plan.            

are in the best interests of Ariel and its stockholders. The disinterested      
members of the Ariel board unanimously recommend that Ariel stockholders vote   
"FOR" the approval of these proposals.                                          

The members of the Ariel board of directors have also determined that:    

. electing Ariel's current board of directors to serve until the earlier of 
(i) the completion of the term for which each was previously elected,   
(ii) the closing of the merger or (iii) until their successors are duly 
elected and qualified                                                   

is in the best interest of Ariel and its stockholders, and unanimously          
recommend that Ariel stockholders vote "FOR" election of Messrs. Agnello, Goei, 
Paul, Burlinson, Fuchs, Schneider and Atlas.                                    

 The matters to be considered at the special meeting are of great importance
to Ariel stockholders. Accordingly, Ariel stockholders are urged to read and    
carefully consider the information presented in this document, and to complete, 
date, sign and promptly return the enclosed proxy in the enclosed postage-paid  
envelope.                                                                       

Ariel stockholders should not send any stock certificates with their proxy
cards.                                                                          

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MAYAN SPECIAL MEETING 

General                                                                         

MAYAN is furnishing this document to MAYAN shareholders in connection with
the solicitation of proxies by the MAYAN board of directors for use at the      
special meeting of shareholders of MAYAN to be held on         , 2001, and any  
adjournment or postponement thereof.                                            

Date, Time and Place                                                            

The special meeting will be held on             , 2001, beginning at [ : ]
a.m., local time, at   .                                                        

Matters to be Considered at the Special Meeting                                 

At the MAYAN special meeting and any adjournment or postponement of the   
special meeting, MAYAN shareholders will be asked:                              

. to consider and vote upon the approval and adoption of the merger         
agreement.                                                              

In addition, in connection with the approval of the merger, a sufficient  
number of holders of preferred stock of MAYAN will be required to convert the   
preferred stock they hold into common stock of MAYAN immediately prior to the   
effective time of the merger pursuant to Article III, Section B(4)(b)(ii) of    
MAYAN's Amended and Restated Articles of Incorporation to cause the automatic   
conversion of all of MAYAN's preferred stock into common stock.                 

Record Date                                                                     

MAYAN's board has fixed the close of business on           , 2001, as the 
record date for determination of MAYAN shareholders entitled to notice of and   
to vote at the special meeting.                                                 

Voting of Proxies                                                               

MAYAN requests that all holders of MAYAN common stock on the record date  
complete, date and sign the accompanying proxy card for common shareholders,    
and that all holders of MAYAN preferred stock on the record date complete, date 
and sign the accompanying proxy card for preferred shareholders, and promptly   
return them in the accompanying envelope or otherwise mail them to MAYAN. All   
properly executed proxy cards that MAYAN receives prior to the vote at the      
special meeting, and that are not revoked, will be voted in accordance with the 
instructions indicated on the proxy cards. If no direction is indicated on any  
proxy card, it will be voted in favor of approval and adoption of the merger    
agreement and approval of the merger.                                           

A MAYAN shareholder may revoke a proxy at any time prior to its use:      

. by delivering to the secretary of MAYAN a signed notice of revocation;    

. by delivering to the secretary of MAYAN a later-dated, signed proxy card; 
or                                                                      

. by attending the special meeting and voting in person.                    

Attendance at the special meeting does not in itself constitute the       
revocation of a proxy.                                                          

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Votes Required                                                                  

In order for the merger to be effective:                                  

. the holders of a majority of the shares of MAYAN common stock outstanding 
as of the record date, voting as a class, and                           

. the holders of a majority of the shares of MAYAN preferred stock          
outstanding as of the record date, voting together as a single class    

must vote to adopt and approve the merger agreement and approve the merger.     

  As of the close of business on the record date, there were         shares of
MAYAN common stock and preferred stock outstanding and entitled to vote,        
consisting of        shares of common stock and 36,000,060 shares of preferred  
stock. The holders of a majority of the outstanding shares of MAYAN common      
stock and the holders of a majority of the outstanding shares of preferred      
stock entitled to vote must approve the merger agreement. MAYAN shareholders    
have one vote per share of MAYAN common stock owned on the record date and one  
vote for each share of common stock into which any preferred stock could be     
converted.                                                                      

In order for the MAYAN preferred stock to be automatically converted into 
shares of MAYAN common stock pursuant to Article III, Section B(4)(b)(ii) of    
MAYAN's Amended and Restated Articles of Incorporation, the holders of a        
majority of the shares of each series of MAYAN preferred stock outstanding as   
of the record date must vote for the conversion of that series preferred stock  
into common stock. As of the close of business on the record date, 1,907,500    
shares of MAYAN Series A preferred stock were issued and outstanding, 7,843,137 
shares of MAYAN Series B preferred stock were issued and outstanding,           
11,826,346 shares of MAYAN Series C preferred stock were issued and outstanding 
and 14,423,077 shares of MAYAN Series D preferred stock were issued and         
outstanding. Each share of MAYAN preferred stock outstanding on the record date 
is entitled to one vote at the special meeting.                                 

As of the record date, the executive officers and directors of MAYAN and  
their affiliates owned        shares of MAYAN common stock and         shares   
of MAYAN preferred stock which are convertible into the same number of shares   
of MAYAN common stock, or approximately      % of the shares of MAYAN capital   
stock outstanding on that date. The directors and executive officers of MAYAN   
have indicated their intention to vote their shares of MAYAN common stock in    
favor of the merger agreement. Under separate voting agreements entered into    
concurrent with the merger agreement, MAYAN's directors and executive officers  
owning approximately      % of MAYAN's capital stock outstanding as of the      
record date have agreed to vote all of their shares of MAYAN capital stock for  
approval of the merger agreement.                                               

  As of March 31, 2001, directors or executive officers of Ariel owned 625,000
shares of MAYAN common stock and had the right to purchase an additional        
1,208,170 shares of MAYAN common stock pursuant to outstanding stock options.   
See "The Merger--Interests of Certain Persons in the Merger."                   

Quorum and Abstentions                                                          

A majority of all shares of MAYAN common stock and preferred stock,       
outstanding as of the record date, each as a separate class, represented in     
person by proxy, constitutes a quorum for the transaction of business at the    
special meeting.                                                                

If you submit a proxy that indicates an abstention from voting in all     
matters, your shares will be counted as present for the purpose of determining  
the existence of a quorum at the special meeting, but they will not be voted on 
any matter at the applicable special meeting. Consequently, your abstention     
will have the same effect as a vote against the proposal to adopt and approve   
the merger agreement.                                                           

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Solicitation of Proxies and Expenses                                            

  MAYAN will solicit proxies from the MAYAN shareholders and will bear its own
expenses in connection with the solicitation of proxies for its special meeting 
of shareholders, except that Ariel and MAYAN each will pay one-half of all      
printing and mailing costs and expenses incurred in connection with the         
registration statement and this document.                                       

In addition to solicitation by mail, the directors, officers and employees
of MAYAN may solicit proxies from shareholders by telephone, email, facsimile   
or in person, but they will not receive any additional compensation for those   
services. Brokerage houses, nominees, fiduciaries and other custodians will be  
requested to forward soliciting materials to beneficial owners and will be      
reimbursed for their reasonable expenses incurred in sending proxy materials to 
beneficial owners.                                                              

Board Recommendations                                                           

  The disinterested members of the MAYAN board have determined that the merger
agreement and the merger are advisable and in the best interests of MAYAN and   
its shareholders. Accordingly, the disinterested members of the board           
unanimously have approved the merger agreement and unanimously recommend that   
shareholders vote "FOR" approval of the merger agreement. In considering that   
recommendation, MAYAN shareholders should be aware that some MAYAN directors    
and officers have interests in the merger that are different from, or in        
addition to, those of MAYAN shareholders, and that Ariel has agreed to provide  
indemnification arrangements to directors and officers of MAYAN. See "The       
Merger--Interests of MAYAN's Management in the Merger and Potential Conflict of 
Interest."                                                                      

 The matters to be considered at the special meeting are of great importance
to the shareholders of MAYAN. Accordingly, MAYAN shareholders are urged to read 
and carefully consider the information presented in this document, and to       
complete, date, sign and promptly return the enclosed proxy in the enclosed     
postage-paid envelope.                                                          

  MAYAN's shareholders should not send any stock certificates with their proxy
cards. A transmittal form with instructions for the surrender of MAYAN common   
stock certificates will be mailed to MAYAN shareholders promptly after          
completion of the merger. For more information regarding the procedures for     
exchanging MAYAN stock certificates for Ariel stock certificates, see "The      
Merger--Exchange of MAYAN Stock Certificates for Ariel Stock Certificates."     

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THE MERGER

This section of the document describes material aspects of the proposed   
merger, including the merger agreement which is attached as Appendix I and      
which we incorporate by reference. While we believe that the description covers 
the material terms of the merger and the related transactions, this summary may 
not contain all of the information that is important to Ariel stockholders and  
MAYAN shareholders. Stockholders should read the entire merger agreement and    
the other documents we refer to carefully and in their entirety for a more      
complete understanding of the merger.                                           

Background of the Merger                                                        

 As a regular part of their business plans MAYAN and Ariel have from time to
time each considered opportunities for expanding and strengthening their        
technology, products, research and development capabilities and distribution    
channels, including strategic acquisitions, business combinations, investments, 
licensing and development agreements and joint ventures.                        

Additionally, in light of the rapid changes in the telecommunications     
equipment industry, including industry consolidation and globalization, the     
MAYAN board of directors regularly met with MAYAN senior management to review   
MAYAN's position relative to its peers and new entrants in the industry, as     
well as the strategic alternatives available to MAYAN in order for it to remain 
competitive and enhance shareholder value.                                      

  Throughout 2000, the Ariel board of directors regularly discussed additional
funding alternatives and strategic partners. In June 2000, the board of         
directors authorized Pennsylvania Merchant Group to act as its investment       
banker in those efforts. Further, Ariel's chairman, Anthony Agnello, was        
authorized to retain additional third parties, on a non-exclusive basis, to act 
as finders for pursuing strategic relationships. In fact, three entities were   
so engaged. Mr. Agnello reported the status of these efforts to the board of    
directors at its meetings of October 19, 2000, December 14, 2000 and January    
26, 2001. Further, at each of those meetings, Dennis Schneider, Ariel's chief   
executive officer and president, and Jack Loprete, Ariel's vice president of    
finance, updated the board of directors regarding funding alternatives.         

Following its December 31, 2000 fiscal year end, the Ariel board of       
directors met to consider Ariel's liquidity needs, its product development      
efforts and potential, its collaborative opportunities, its prospects for       
continuing to operate as an independent company and developments in Ariel's     
marketplace in general.                                                         

  During the first week of February 2001, Esmond Goei, chief executive officer
and a director of MAYAN, who is also Vice Chairman of the Ariel board,          
contacted other members of the Ariel board to discuss whether Ariel would be    
interested in a business combination with MAYAN. Over the next week, Mr. Goei,  
Dan Gatti, president and the former chief executive officer of MAYAN, and Mr.   
Schneider engaged in preliminary discussions regarding a possible business      
combination and the potential market for the combined enterprise.               

On February 15, 2001, prior to any further discussion, MAYAN and Ariel    
signed a non-disclosure agreement.                                              

In the period from February 19 to February 21, 2001, Mr. Goei, Mr. Gatti, 
Mr. Schneider and Dan Brown, vice president of product marketing of MAYAN, held 
several meetings and conference calls to evaluate addressable market and        
revenue opportunities for the combined products. Mr. Goei, Mr. Gatti, Mr.       
Schneider and Mr. Brown also discussed the merits of a potential strategic      
business combination of MAYAN and Ariel, including the opportunities for cost   
savings that could be achieved in products and services, management and sales   
organizations.                                                                  

On February 22, 2001, John Tingleff, chief financial officer of MAYAN, met
with Mr. Goei to discuss the potential terms of a proposed merger of Ariel and  
MAYAN.                                                                          

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 On February 23, 2001, Mr. Goei and Mr. Gatti met with Mr. Schneider and Mr.
Loprete at the Cranbury office of Ariel to present company overviews for MAYAN  
and Ariel. Mr. Goei and Mr. Loprete discussed the potential terms of a business 
combination between the two companies, taking into consideration the cash       
position of each company, relative to the other, the market strength and        
competitive position of each company and the revenue potential for each         
company. A proposal that Ariel stockholders maintain 10% of the equity of the   
combined company, with MAYAN shareholders receiving 90% of the equity was       
discussed, along with other potential terms.                                    

Mr. Loprete held informal discussions with Ariel management and board     
members to discuss those potential terms.                                       

On February 25, 2001, Mr. Goei distributed a term sheet to Messrs. Agnello
and Schneider. The parties ultimately declined to execute the term sheet and    
proceeded directly to negotiate the definitive agreement.                       

On February 26, 2001, Mr. Goei discussed with Brobeck, Phleger & Harrison 
LLP, MAYAN's outside legal counsel, his fiduciary duties and obligations with   
respect to a possible transaction between Ariel and MAYAN. Thereafter, Mr. Goei 
conducted informal discussions with the Ariel board of directors and the other  
members of the MAYAN board of directors to discuss his interests in MAYAN and   
to discuss the benefits of a business combination between Ariel and MAYAN and   
the potential structure for that combination. The discussion involved MAYAN's   
current cash position, its competitive positioning, MAYAN's stage of product    
readiness and its latest financing transaction.                                 

On February 27, 2001, the board of directors of MAYAN met to discuss      
possible strategic alternatives, including possible strategic business          
combinations, including with Ariel. The MAYAN board reviewed competitive        
situations within the metropolitan communications market and evaluated the      
relative strengths and weaknesses in pursuing a possible business combination,  
particularly the combination of MAYAN with a publicly traded entity. The board  
also considered the proposed terms of a combination with Ariel. The MAYAN       
board, with Mr. Goei abstaining, authorized MAYAN management to continue        
discussions with Ariel about a possible transaction.                            

 On February 28, 2001, the Ariel board convened a special meeting to discuss
the merits of a combination with MAYAN and to discuss the proposed terms of a   
combination. The Ariel board, with Mr. Goei abstaining, authorized Ariel        
management to proceed with further discussions and with the negotiation of a    
definitive merger agreement with MAYAN.                                         

During the period from February 28 through March 2, 2001, a representative
of MAYAN conducted a series of due diligence meetings at Ariel's office in      
Cranbury. Various members of the Ariel management team met with the MAYAN       
representative to discuss the status of current operations and possible cost    
savings associated with the combination.                                        

  On March 6, 2001, the board of directors of MAYAN, along with observers, met
to discuss the potential benefits and costs of a combination with Ariel,        
including possible strategic alternatives, MAYAN's current competitive position 
in the market, the volatility of the telecommunications industry, the potential 
cost savings of a combination with Ariel, the potential for liquidity for the   
MAYAN shareholders, the assumption of Ariel liabilities, entry into the public  
markets and the future disclosure obligations associated with that entry,       
market acceptance of the combined company, the length of time necessary to      
complete the transaction and the expenses involved in doing so. Representatives 
of Brobeck attended the meeting. The board, with Mr. Goei abstaining,           
authorized Brobeck to proceed with the preparation of a definitive merger       
agreement.                                                                      

On March 9, 2001, Mr. Goei, Mr. Gatti and Mr. Tingleff met with           
representatives of Robertson Stephens in New York to discuss the proposed       
transaction and the engagement of Robertson Stephens as MAYAN's financial       
advisor for the transaction.                                                    

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On March 10, 2001, an informal conference call among the MAYAN management 
team, and representatives of Brobeck and Robertson Stephens was conducted to    
update each party on the status of the transaction and to discuss the potential 
terms of the transaction and the treatment of MAYAN's outstanding convertible   
promissory notes.                                                               

 On March 12, 2001, MAYAN convened a special telephonic meeting of the board
of directors and observers to discuss the proposed merger between MAYAN and     
Ariel, to approve the formation of a special acquisition committee of the board 
of directors to lead negotiations and be available to assist management and     
outside counsel in discussions regarding the potential merger, and to approve   
the negotiation of a definitive merger agreement. At the beginning of the       
meeting, Mr. Goei disclosed in detail his interest in the transaction as a      
director, shareholder and optionee in both corporations and discussed his       
involvement at Ariel. Following a series of questions for Mr. Goei, Mr. Goei    
left the meeting and removed himself from further discussions and negotiation   
in connection with the transaction. Robertson Stephens presented various        
alternatives to the proposed transaction. Brobeck discussed the proposed        
transaction structure, as well as the risks and legal aspects of, including the 
fiduciary duties of the board in regards to, the proposed transaction with      
Ariel. The MAYAN board, with Mr. Goei abstaining, considered all of the matters 
discussed, reviewed the proposed transaction terms under discussion by the      
parties, appointed Jim Mongiello and Steve Krausz, both disinterested members   
of the MAYAN board, as the special acquisition committee of the board of        
directors and approved the negotiation of a definitive merger agreement, as     
well as the engagement of Robertson Stephens as MAYAN's financial advisor for   
the transaction pursuant to an engagement letter, dated March 13, 2001.         

On March 12, 2001, the special acquisition committee directed Brobeck to  
distribute a first draft of the merger agreement.                               

On March 16, 2001, the Ariel board convened another special meeting to    
discuss the benefits of the MAYAN transaction and possible alternatives to it.  
Mr. Goei was not present at the meeting. The members of the board present       
determined to retain Needham & Company, Inc. as its financial advisor to advise 
it in connection with the possible merger with MAYAN and to render a fairness   
opinion if the board were to determine to proceed with a merger with MAYAN. The 
board also authorized management to retain Steptoe & Johnson, LLP and Paul &    
Rosen, LLP as special counsel to provide legal assistance in connection with    
the transaction, and through management, directed Steptoe & Johnson, LLP to     
provide Ariel's initial comments on the draft of the merger agreement           
previously distributed by Brobeck. On March 16, 2001, Brobeck distributed a     
second draft of the merger agreement, and preliminary drafts of ancillary       
agreements to the merger agreement.                                             

During the period of March 19 and March 22, Brobeck and Steptoe & Johnson 
LLP participated in a series of negotiations on the terms of the merger         
agreement and the ancillary agreements by teleconference. These negotiations    
covered all aspects of the transaction, including, among other things, the      
representations and warranties made by the parties, the restriction on the      
conduct of their business, the terms of the conduct of the parties pending      
closing, additional covenants, the terms of the non-solicitation covenant,      
Nasdaq listing requirements and the termination provisions.                     

Between the period of March 19 and March 24, Mr. Tingleff had multiple    
discussions with the special acquisition committee regarding the status of the  
transaction and various business terms relating to the agreements.              

On March 21, 2000, Mr. Schneider sent Mr. Tingleff a partial draft of the 
Ariel 2000 10-K report.                                                         

On March 22, 2001, the Ariel board held a special meeting to review drafts
of the revised merger agreement and related agreements, which had been          
separately provided to each member prior to the meeting. All members other than 
Mr. Goei were present. The board reviewed and discussed the principal terms of  
the merger agreement and the ancillary agreements, including the bridge loan    
and security agreements required by MAYAN to secure the bridge loan. The board  
then reviewed and discussed the principal terms of the proposed transaction,    
the merger consideration, the conditions to closing, the covenants that Ariel   
was required to make, Ariel's financial condition including its liquidity and   
need for financing to continue operations, and the                              

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alternatives available to Ariel. A representative of Needham & Company was      
present and made a financial presentation to the board regarding the proposed   
merger with MAYAN. The Needham & Company representative indicated that based on 
their analysis as of that date and based on the financial terms set forth in    
the draft merger agreement as of that date, Needham & Company expected to be    
able to deliver a written opinion to the effect that the proposed exchange      
ratio is fair to Ariel from a financial point of view. After the presentation,  
the board members who were present unanimously approved the terms of the merger 
agreement subject to the receipt of the aforesaid written opinion from Needham  
& Company with such changes as Ariel's officers deemed appropriate and          
authorized Ariel's officers to execute, on behalf of Ariel, the merger          
agreement and the ancillary agreements.                                         

  On March 23, 2001, representatives from Brobeck met with Mr. Tingleff at the
MAYAN office in San Jose to discuss the status of the transaction. Brobeck      
briefed Mr. Tingleff of MAYAN's legal duties and responsibilities in connection 
with considering the merger, and reviewed the principal terms of the merger     
agreement and related agreements. Mr. Tingleff reviewed the status of the       
negotiation, the principal issues in the proposed transaction, and outstanding  
issues and documents to be provided by Ariel.                                   

On March 25, 2001, an informal conference call was conducted among Mr.    
Tingleff, the special acquisition committee and Brobeck to update the committee 
on the status of the negotiations, and the possible treatment of MAYAN's        
convertible promissory notes. The special acquisition committee reviewed the    
status of the transaction and principal issues of the debt exchange offer and   
evaluated the potential outcomes in connection to the proposed exchange offer.  
The committee authorized Mr. Tingleff to proceed with further investigation and 
discussions regarding the potential debt exchange offer.                        

On March 27, 2001, Ariel amended its shareholder rights plan to exempt the
MAYAN transaction from triggering the rights under the plan.                    

On March 28, 2001, Needham & Company delivered to the Ariel board its     
written opinion that, as of that date and subject to the various considerations 
set forth in the opinion, the exchange ratio was fair to Ariel from a financial 
point of view.                                                                  

On March 28, 2001, MAYAN convened a special meeting of the board of       
directors to review and discuss the final merger agreement and the ancillary    
agreements, which had been separately provided to each member of the board      
prior to the meeting. Representatives of Robertson Stephens and Brobeck were    
present. Brobeck briefed the board on the board's legal duties and              
responsibilities in connection with the merger with Ariel, and reviewed the     
principal terms of the merger agreement and the ancillary agreements. The MAYAN 
board reviewed and discussed the principal terms of the proposed transaction,   
the merger consideration, the conditions to closing and covenants of Ariel, the 
termination rights and the ability of Ariel and MAYAN to consider alternative   
proposals. Robertson Stephens gave a presentation at which materials relating   
to its analyses were discussed. Robertson Stephens then delivered its oral      
opinion, subsequently confirmed in writing, that as of that date, the exchange  
ratio was fair to the holders of MAYAN common stock from a financial point of   
view. After the presentation, the special acquisition committee recommended and 
the disinterested members of the MAYAN board then unanimously approved (with    
Mr. Goei abstaining) the terms of the merger agreement and authorized Mr.       
Tingleff to execute, on behalf of MAYAN, the merger agreement.                  

On March 28, 2001, MAYAN and Ariel each executed the merger agreement, and
the officers and directors of MAYAN entered into voting agreements with Ariel   
and agreed to vote their share in favor of the transaction. On the same day,    
Ariel and MAYAN issued a joint press release after the Nasdaq National Market   
closed announcing the merger.                                                   

Recommendation of the Ariel Board of Directors and Ariel's Reasons for the      
Merger                                                                          

The disinterested members of Ariel's board of directors unanimously       
concluded that the merger was in the best interests of Ariel and its            
stockholders, and determined to recommend that the stockholders approve the     
merger agreement as well as the other proposals required in connection with the 
merger, including the amendment                                                 

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to Ariel's certificate of incorporation to increase the number of authorized    
shares of Ariel common stock and effect a reverse stock split of Ariel's common 
stock, and the implementation of the 2001 Stock Incentive Plan. This decision   
was based upon several potential benefits of the merger that Ariel's board      
believes will contribute to the success of the combined company. These          
potential benefits from combining MAYAN with Ariel include:                     

. providing Ariel with the financial resources to support the development   
of its product and its expansion in the ISP and the OEM market;         

. the complementary nature of each company's product offering as an         
extension of the offering of the other company, the potential for an    
integrated Optical BypaSS7 product that frees up precious voice circuits
for central offices suffering from data call congestion, and the        
potential for other products based on the combined technologies of the  
two companies;                                                          

. increased distribution channels for Ariel's products through MAYAN's      
portfolio of partners;                                                  

. increased distribution channels for MAYAN's products and services through 
Ariel's base of customers;                                              

. increased product diversification and penetration of each company's       
customer base;                                                          

. similarities in corporate culture;                                        

. the opportunity for expanded research and development of the combined     
product offerings, including potential new product offerings; and       

. obtaining the experience and expertise of engineers and design            
specialists to help advance Ariel's business and technology.            

The disinterested members of Ariel's board reviewed a number of factors in
evaluating the merger, including, but not limited to, the following:            

. information concerning MAYAN's business, financial performance and        
condition, operations, technology and management;                       

. information concerning the financial condition, results of operations and 
businesses of Ariel and MAYAN before and after giving effect to the     
merger;                                                                 

. the financial condition and results of operations and prospects of Ariel  
in the absence of a business combination;                               

. Ariel's lack of liquidity and lack of prospects to obtain funding if the  
merger is not consummated;                                              

. current financial market conditions and historical market prices,         
 volatility and trading information with respect to Ariel common stock and
MAYAN common stock;                                                     

. the anticipated substantial adverse effects on Ariel's stockholders and   
 present and potential employees, business partners and lenders that would
result from insolvency or concerns about the potential for it;          

. the anticipated benefits that would arise from entering into the merger   
agreement and the bridge loan, including the substantial lessening of   
those liquidity and solvency concerns;                                  

. the consideration Ariel will issue in the merger in light of comparable   
merger transactions;                                                    

. the belief that the terms of the merger agreement and related agreements  
are reasonable;                                                         

. the impact of the merger on the customers and employees of Ariel and the  
combined company;                                                       

. Ariel's management's view as to the integration of MAYAN;                 

. results of the due diligence investigation conducted by Ariel's           
management, accountants, financial advisors and legal counsel; and      

. the analyses and presentations prepared by Needham & Company and Needham  
 & Company's written opinion to the effect that, as of March 28, 2001, and
subject to the various considerations set forth in its opinion, the     
exchange ratio was fair from a financial point of view to Ariel.        

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 The disinterested members of Ariel's board also considered the terms of the
merger agreement regarding Ariel's rights and limits on its ability to consider 
and negotiate other strategic transaction proposals, as well as the possible    
effects of the provisions regarding conditions to closing. In addition, it was  
noted to Ariel's board that the merger is expected to be a tax-free transaction 
and accounted for as a purchase, and that significant goodwill is expected to   
be created on the books of the combined company as a result of the merger.      

 The disinterested members of Ariel's board also identified and considered a
number of potentially negative factors in its deliberations concerning the      
merger including the following:                                                 

. the risk that the potential benefits of the merger may not be realized;   

. the risk that the merger may not be consummated, notwithstanding the      
voting agreements obtained from holders of approximately 58.97% of      
MAYAN's outstanding common stock and preferred stock as of March 31,    
2001;                                                                   

. the risk that if the merger is not completed, Ariel will not have working 
capital to fund its operations and it would be required to repay any    
 amounts advanced to it by MAYAN between execution of the merger agreement
and closing or termination;                                             

. the assumption of MAYAN's convertible subordinated promissory notes and   
the reaction of the noteholders to the proposed merger;                 

. MAYAN's recent layoffs and shifts in strategic direction including        
additional potential acquisitions;                                      

. the risk of management and employee disruption associated with the        
merger, including the risk that despite the efforts of the combined     
company, key technical, sales and management personnel might not remain 
employed by the combined company;                                       

. the challenges of integrating Ariel's operations in New Jersey, France    
and Germany with MAYAN's operations in California, Texas and Arizona and
the related challenges of conducting multi-site operations in several   
states and countries;                                                   

. the acceleration of the vesting of options upon execution of the merger   
agreement for certain employees of Ariel may result in "excess parachute
 payments" as defined in Section 280G of the Internal Revenue Code. Excess
 parachute payments are not deductible in accordance with Section 280G. As
a result, Ariel will not be entitled to a tax deduction for the amounts 
determined to be excess parachute payments; and                         

. other applicable risks described in this document under "Risk Factors."   

The disinterested members of Ariel's board concluded, however, that, on   
balance, the merger's potential benefits to Ariel and its stockholders          
outweighed the associated risks. This discussion of the information and factors 
considered by the disinterested members of Ariel's board is not exhaustive. In  
view of the variety of factors considered in connection with its evaluation of  
the merger, Ariel's board did not find it practicable to, and did not quantify  
or otherwise assign relative weight to, the specific factors considered in      
reaching its determination.                                                     

 For the Reasons Discussed Above, the Disinterested Members of Ariel's Board
of Directors Unanimously Have Determined the Merger Agreement and the Merger,   
and the Transactions Contemplated Thereby, Including the Change of Ariel's Name 
to "MAYAN Networks Corporation" to Be Fair to and In the Best Interests of      
Ariel and Its Stockholders. In Connection With the Merger, the Disinterested    
Members of Ariel's Board of Directors Unanimously Recommend That Ariel          
Stockholders Vote For Approval of the Merger Agreement.                         

  The Disinterested Members of Ariel's Board of Directors Have Also Determined
That the Proposal to Amend Ariel's Certificate of Incorporation to Increase the 
Number of Authorized Shares of Ariel Common Stock and Effect a Reverse Split of 
Ariel's Common Stock, the Proposal to Approve the Implementation of the 2001    
Stock Incentive Plan and the Proposal to Elect Ariel's Current Board of         
Directors Are Also In the Best Interest of Ariel and Its Stockholders, and      
Unanimously Recommend That Ariel Stockholders Vote For the Approval of These    
Proposals.                                                                      

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Opinion of Ariel's Financial Advisor                                            

Pursuant to an engagement letter dated March 20, 2001, Ariel retained     
Needham & Company to render an opinion as to the fairness, from a financial     
point of view, of the proposed exchange ratio to Ariel. The proposed exchange   
ratio was determined through arm's length negotiations between Ariel and MAYAN  
and not by Needham & Company.                                                   

 On March 28, 2001, Needham & Company delivered its written opinion that, as
of that date and based upon and subject to the assumptions and other matters    
described in the written opinion, the proposed exchange ratio is fair to Ariel  
from a financial point of view. The Needham & Company opinion is addressed to   
the Ariel board, is directed only to the financial terms of the merger          
agreement, and does not constitute a recommendation to any Ariel stockholder as 
to how that stockholder should vote at the Ariel special meeting.               

The complete text of the Needham & Company opinion, which sets forth the  
assumptions made, matters considered, limitations on and scope of the review    
undertaken by Needham & Company, is attached to this document as Appendix VII.  
The summary of the Needham & Company opinion set forth in this document is      
qualified in its entirety by reference to the Needham & Company opinion. You    
should read the Needham & Company opinion carefully and in its entirety for a   
description of the procedures followed, the factors considered, and the         
assumptions made by Needham & Company.                                          

In arriving at its opinion, Needham & Company, among other things:        

. reviewed a draft of the merger agreement dated March 28, 2001;            

. reviewed publicly available information concerning Ariel and other        
relevant financial and operating data of Ariel and MAYAN furnished to   
Needham & Company by Ariel and MAYAN;                                   

. held discussions with members of management of Ariel and MAYAN concerning 
the current and future business prospects of Ariel and MAYAN;           

. reviewed and discussed with the management of Ariel and MAYAN historical  
financial statements and financial forecasts and projections prepared by
those respective management teams;                                      

. reviewed the historical stock prices and trading volumes of Ariel common  
stock;                                                                  

.  compared publicly available financial data of companies whose securities 
are traded in the public markets and that Needham & Company deemed    
generally relevant to similar data for Ariel and MAYAN;               

.  reviewed the financial terms of other business combinations that Needham 
& Company deemed generally relevant; and                              

.  performed and/or considered other studies, analyses, inquiries and       
investigations as Needham & Company deemed appropriate.               

In addition, Needham & Company held discussions with members of Ariel's   
management concerning Ariel's views as to:                                      

.  the anticipated adverse effects on Ariel's business, assets,             
  liabilities, operations and prospects that Ariel believes would occur if
Ariel were not to enter into the merger agreement and the bridge loan;

.  the liquidity position of Ariel and its ability to continue as a going   
concern;                                                              

.  Ariel's anticipated inability to remedy its liquidity shortfall in a     
timely manner and the substantial risk of Ariel becoming insolvent and
seeking the protection of state insolvency or federal bankruptcy law; 

.  the anticipated substantial adverse effects on Ariel's stockholders and  
present and potential employees, business partners and lenders that   
  would result from insolvency or concerns about the potential for it; and

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.  the anticipated benefits that would arise from entering into the merger  
agreement and the bridge loan, including the substantial lessening of 
those liquidity and solvency concerns.                                

  Needham & Company assumed and relied upon, without independent verification,
the accuracy and completeness of the information reviewed by or discussed with  
it for purposes of rendering its opinion. Needham & Company assumed that the    
financial forecasts relating to Ariel and MAYAN and information relating to the 
joint prospects of the combined companies were reasonably prepared on bases     
reflecting the best currently available estimates and judgments of the          
managements of Ariel and MAYAN, at the time of preparation, of the future       
operating and financial performance of Ariel, MAYAN and the combined companies. 
Needham & Company assumed for purposes of its opinion that the number of shares 
of Ariel common stock used in calculating the exchange ratio and issuable to    
MAYAN securityholders, other than holders of MAYAN's convertible subordinated   
notes, will be no greater than        , after giving effect to the one for      
reverse stock split. Needham & Company did not assume any responsibility for or 
make or obtain any independent evaluation, appraisal or physical inspection of  
the assets or liabilities of Ariel or MAYAN. The Needham & Company opinion      
states that it was based on economic, monetary and market conditions existing   
as of its date. Needham & Company expressed no opinion as to what the value of  
Ariel common stock will be when issued to the stockholders of MAYAN pursuant to 
the merger or the prices at which Ariel common stock will actually trade at any 
time. In addition, Needham & Company was not asked to consider, and the Needham 
& Company opinion does not address:                                             

.  Ariel's underlying business decisions to engage in the merger;           

.  the relative merits of the merger as compared to any alternative         
business strategies that might exist for Ariel; or                    

.  the effect of any other transaction in which Ariel might engage.         

No limitations were imposed by Ariel on Needham & Company with respect to 
investigations made or procedures followed by Needham & Company in rendering    
its opinion.                                                                    

Based on this information, Needham & Company performed a variety of       
financial analyses of the merger and the merger consideration. The following    
paragraphs summarize the material financial analyses performed by Needham &     
Company in arriving at its opinion.                                             

  Contribution Analysis. Needham & Company reviewed and analyzed the pro forma
contribution of each of Ariel and MAYAN to pro forma combined balance sheet     
information as of December 31, 2000 and to pro forma projected calendar 2001    
and 2002 operating results. Needham & Company reviewed, among other things, the 
pro forma contributions to revenues, net income, assets and stockholders'       
equity. This analysis indicated that Ariel would have contributed:              

. 79.7% of estimated calendar 2001 pro forma combined revenues,             

. 46.1% of estimated calendar 2002 pro forma combined revenues,             

. 7.7% of estimated calendar 2001 pro forma combined net loss,              

. 1% of pro forma combined cash as of December 31, 2000,                    

. 9% of the pro forma combined total assets as of December 31, 2000, and    

. 24% of the pro forma combined stockholders' equity as of December 31,     
2000.                                                                   

  Based on the exchange ratio, Ariel's stockholders will own approximately 10%
of Ariel after the merger. The results of the contribution analysis are not     
necessarily indicative of the contributions that the respective businesses may  
have in the future.                                                             

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 Liquidation Value Analysis. Needham & Company conducted a liquidation value
analysis to analyze possible scenarios if the merger was not consummated and    
additional sources of financing were not available to Ariel. Needham &          
Company's analysis reviewed the possible values of Ariel's net assets in a      
liquidation based upon three scenarios. These scenarios were based upon         
different assumptions with respect to, among other things, the following: the   
percentages of the book value of tangible assets on Ariel's December 31, 2000   
audited balance sheet that may be realized upon a liquidation; and the values,  
based upon discussions with Ariel's management, estimated to be receivable upon 
liquidation for Ariel's intellectual property and other tangible assets. The    
results of this analysis showed that in one of the three scenarios, amounts     
received from the sale of Ariel's assets upon liquidation would be insufficient 
to cover the book value of liabilities as of December 31, 2000 by $240,000. In  
the second and third possible scenarios, the net value estimated to be realized 
upon liquidation of Ariel's assets, less its liabilities, was $2,227,000, or    
$0.17 per share, and $4,622,000, or $0.35 per share, respectively. Needham &    
Company noted Ariel management's assessment that Ariel's liquidity position     
coupled with its inability to raise financing other than the bridge loan from   
MAYAN raised substantial doubts as to Ariel's ability to continue as a going    
concern.                                                                        

Discounted Cash Flow Analysis. Needham & Company also analyzed MAYAN based
on a discounted cash flow analysis of the estimated performance of MAYAN. For   
this purpose, Needham & Company used estimated consolidated income statements   
for MAYAN for the third and fourth quarters of 2001, calendar year 2002 and the 
first and second quarters of 2003 provided by MAYAN management and for the      
third and fourth quarters of 2003 prepared by Needham & Company with the        
assistance of Ariel and MAYAN management. The discounted cash flow analysis     
determined the estimated after-tax cash flows to be generated over the period   
commencing with the beginning of the third calendar quarter of 2001 and then    
added a terminal value based upon a range of earnings multiples of comparable   
optical networking companies.                                                   

  The after-tax cash flows and terminal values for MAYAN were discounted using
a range of discount rates of 50% to 70%. The present value of cash flows of     
MAYAN was negative due to the operating losses estimated by management to occur 
through calendar 2002. Accordingly, the terminal value represented more than    
100% of the present value of the MAYAN equity determined by the discounted cash 
flow analysis. The discounted cash flow analysis resulted in a range of         
discounted cash flow values for MAYAN from approximately $578.4 million to      
$844.1 million. These values represent between $3.44 to $5.02 per share         
issuable to MAYAN securityholders pursuant to the merger based upon the         
proposed exchange ratio.                                                        

Accretion/Dilution Analysis. Needham & Company reviewed various pro forma 
financial impacts of the merger on the holders of Ariel common stock based on   
the proposed exchange ratio and estimated financial results, as adjusted to     
reflect the combined company's new Optical BypaSS7 product, and assuming        
synergies resulting from the merger of $1.0 million. Needham & Company noted    
that the merger would result in accretion to the estimated earnings per share   
of Ariel common stock for the fiscal year ending December 31, 2001 and in       
dilution to the estimated earnings per share for the fiscal year ending         
December 31, 2002. The actual operating or financial results achieved by the    
combined entity may vary from projected results, and these variations may be    
material.                                                                       

Selected Transaction Analysis. Needham & Company also analyzed publicly   
available financial information for selected mergers and acquisitions of        
technology companies that represent transactions since November 1998 involving  
companies engaged in businesses that were deemed generally comparable to        
Ariel's business. In examining the selected transactions, Needham & Company     
analyzed:                                                                       

. the enterprise value as a multiple of net sales for the last twelve       
months, or LTM net sales; and                                           

. market value as a multiple of net income for the last twelve months.      

In some cases, complete financial data was not publicly available for the       
selected transactions and only partial information was used in those instances. 

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 Needham & Company also analyzed, for the selected transactions, the premium
of consideration offered to the acquired company's stock price one day, one     
week and four weeks prior to the announcement of the transaction, as well as    
target company equity value to LTM net sales but determined that the results    
were not meaningful due to Ariel's liquidity position and general financial     
condition. Needham & Company noted that the selected transactions involved      
companies that did not have the severe lack of liquidity to which Ariel was     
subject.                                                                        

The transactions analyzed by Needham & Company were:                      

                                                                [Download Table]
                                                                       
     Acquirer                                            Target        
     --------                                            ------        
Avocent Corporation                               Equinox Systems, Inc.
 Intel Corporation                                Dialogic Corporation 
Cisco Systems, Inc.                                 Summa Four, Inc.   

Needham & Company also reviewed information regarding the pending         
acquisition of Lan Media Corporation by SBE, Inc. but complete financial data   
was not publicly available.                                                     

The following table sets forth information concerning the multiples of    
target company enterprise value to LTM net sales for the selected transactions. 

                                                                [Download Table]

                                                      Selected Transactions
                                                      ---------------------
                                                      High Low  Mean Median
                                                      ---- ---- ---- ------
                                                                           
Target enterprise value to LTM net sales............. 2.9x 2.3x 2.6x  2.7x 

Applying the range of multiples for the selected transactions to          
corresponding financial data for Ariel resulted in a range of implied           
enterprise values for Ariel of $18.8 million to $23.1 million. Deducting        
approximately $2.0 million in debt resulted in a range of implied equity values 
for Ariel of $16.8 million to $21.1 million, or $1.28 to $1.61 per share.       
Needham & Company noted that the closing sale price per share for the Ariel     
common stock on March 27, 2001 was $1.25.                                       

  Needham & Company placed relatively less emphasis on the "Accretion/Dilution
Analysis" and the "Selected Transaction Analysis" due to Ariel's severe         
liquidity constraints and lack of alternatives within the time frame required   
to alleviate its cash shortfall. No company, transaction or business used in    
the "Selected Transaction Analysis" as a comparison is identical to Ariel,      
MAYAN or the merger. Accordingly, these analyses are not simply mathematical;   
rather, they involve complex considerations and judgments concerning            
differences in the financial and operating characteristics and other factors    
that could affect the acquisition, public trading or other values of the        
selected transactions and the companies involved in them or the transaction to  
which they are being compared.                                                  

  Other Analyses. In rendering its opinion, Needham & Company considered other
analyses, including a history of trading prices and volumes for Ariel and an    
analysis of the stock price performance and selected financial and operating    
data of a group of publicly traded companies that Needham & Company deemed      
generally comparable to Ariel and MAYAN. Needham & Company primarily used the   
analysis of other companies to provide guidance in determining the earnings     
multiples used in the discounted cash flow analysis of MAYAN. Needham & Company 
reviewed the range of earnings multiples of companies that were deemed          
generally comparable to MAYAN and, after taking into consideration differences  
in the financial and operating characteristics of those companies, determined   
the ranges of earnings multiples used in the discounted cash flow analysis.     

  The summary set forth above does not purport to be a complete description of
the analyses performed by Needham & Company in connection with the rendering of 
its opinion. The preparation of a fairness opinion involves various             
determinations as to the most appropriate and relevant quantitative and         
qualitative methods of financial analyses and the application of those methods  
to the particular circumstances and, therefore, the                             

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fairness opinion is not readily susceptible to summary description.             
Accordingly, Needham & Company believes that its analyses must be considered as 
a whole and that considering any portions of its analyses and of the factors    
considered, without considering all analyses and factors, could create a        
misleading or incomplete view of the process underlying its opinion. In its     
analyses, Needham & Company made numerous assumptions with respect to industry  
performance, general business and economic and other matters, many of which are 
beyond the control of Ariel and MAYAN. Any estimates contained in these         
analyses are not necessarily indicative of actual values or predictive of       
future results or values, which may be significantly more or less favorable.    
Additionally, analyses relating to the values of business or assets do not      
purport to be appraisals or necessarily reflect the prices at which businesses  
or assets may actually be sold. Accordingly, these analyses and estimates are   
inherently subject to substantial uncertainty. The Needham & Company opinion    
and Needham & Company's related analyses were only one of many factors          
considered by Ariel's board of directors in its evaluation of the proposed      
merger and should not be viewed as determinative of the view of Ariel's board   
of directors or management with respect to the exchange ratio or the proposed   
merger.                                                                         

Under the terms of the Needham & Company engagement letter, Ariel has paid
or agreed to pay Needham & Company fees for rendering the Needham & Company     
opinion that Ariel and Needham & Company believe are customary in transactions  
of this nature. No portion of Needham & Company's fees are contingent on        
consummation of the merger. Ariel has also agreed to reimburse Needham &        
Company for its reasonable out-of-pocket expenses and to indemnify it against   
specified liabilities relating to or arising out of services performed by       
Needham & Company as financial advisor to Ariel.                                

Needham & Company is a nationally recognized investment banking firm. As  
part of its investment banking services, Needham & Company is frequently        
engaged in the evaluation of businesses and their securities in connection with 
mergers and acquisitions, negotiated underwritings, secondary distributions of  
securities, private placements and other purposes. Needham & Company was        
retained by the Ariel board of directors to render an opinion as to the         
fairness, from a financial point of view, of the proposed exchange ratio to     
Ariel based on Needham & Company's experience as a financial advisor in mergers 
and acquisitions as well as Needham & Company's familiarity with technology     
companies and with Ariel. Needham & Company has in the past provided investment 
banking services to Ariel, for which it received fees. In the past two years,   
Needham & Company acted as a placement agent in connection with the February    
2000 sale of Ariel common stock and warrants to purchase Ariel common stock,    
for which it received customary fees. As partial compensation for these         
services, Needham & Company received, and currently holds, a warrant to         
purchase        shares of Ariel common stock at an exercise price of $      per 
share, after giving effect to the one for     reverse stock split which is      
expected to occur immediately prior to the effective time of the merger. In the 
normal course of business, Needham & Company may actively trade the equity      
securities of Ariel for its own account or for the account of its customers     
and, therefore, may at any time hold a long or short position in these          
securities.                                                                     

Recommendation of the MAYAN Board of Directors and MAYAN's Reasons for the      
Merger                                                                          

In addition to the anticipated joint benefits described above, the MAYAN  
board believes that additional reasons the merger will be beneficial to MAYAN   
and its shareholders include:                                                   

. Ariel's existing customer base, pipeline and products provide new         
opportunities to market MAYAN's products and services to a much larger  
 group of ISP customers, which MAYAN believes can help create and preserve
shareholder value and growth;                                           

. MAYAN will obtain the experience and expertise of engineers and design    
specialists to help advance MAYAN's business and technology;            

. the potential for the merger to increase the ability of each company to   
achieve profitability, as a result of product sales and distribution    
synergies and cross-selling opportunities, the opportunity to leverage  
the recurring maintenance revenues of the combined company and the      
opportunity to reduce overhead and other costs;                         

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. the opportunity to enhance relationships with technology partners and     
other strategic partners and to attract new partners;                   

. the opportunity to increase the competitive position of the combined      
company by offering a broad product family to a large customer base and 
by combining the technology, sales and management resources of MAYAN and
Ariel;                                                                  

. the ability of the combined company to offer complementary product lines, 
which presents the opportunity to increase the breadth of products      
offered and to be a single source provider of a range of complementary  
products and services;                                                  

. the ability of the two companies to combine their technological resources 
to develop new products with increased functionality and bring them to  
market faster;                                                          

. the availability to the combined company of greater resources for product 
marketing and distribution;                                             

. increased product diversification and penetration of each company's       
customer base;                                                          

. similarities in corporate culture;                                        

. MAYAN's belief that greater size and resources are increasingly required  
for companies to successfully compete in this industry;                 

. MAYAN's belief that the Ariel common stock may be a currency which could  
be used to finance future acquisitions at a faster pace and at a less   
dilutive price than what MAYAN could do with its own stock on its own;  

. the difficulty of completing an initial public offering;                  

. the merger will provide MAYAN shareholders with shares of Ariel common    
stock which are listed on the Nasdaq National Market in a tax-free      
exchange transaction;                                                   

. the treatment of MAYAN's outstanding convertible subordinated promissory  
notes after the merger, including the convertibility of the notes into  
the common stock of Ariel; and                                          

. the lack of other suitable acquisition candidates.                        

The disinterested members of MAYAN's board reviewed a number of factors in
evaluating the merger, including, but not limited to, the following:            

. historical information and the views of MAYAN's management and financial  
advisers concerning the strengths and weaknesses of MAYAN and Ariel and 
 the key attributes and opportunities of the combined company in terms of,
 among other things, products, sales, customers, management, and financial
and competitive position;                                               

. MAYAN's management's view of the financial condition, results of          
operations and businesses of MAYAN and Ariel before and after giving    
 effect to the merger and the board's determination of the merger's effect
on shareholders;                                                        

. the financial condition and results of operations and prospects of MAYAN  
and Ariel in the absence of a business combination;                     

. the anticipated impact of the merger on MAYAN's customers, strategic      
 partners and employees and their expected reaction to the announcement of
the merger;                                                             

. the percentage ownership of the combined company of MAYAN's shareholders; 

. the uncertain current and prospective market environment for MAYAN's      
products and services;                                                  

. the substantial charges and costs to be incurred in connection with the   
merger, including costs of integrating the businesses and transaction   
expenses arising from the merger;                                       

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. the prospects of MAYAN independent of Ariel, including risks and          
potential rewards associated with remaining independent in the face of  
industry-wide consolidation;                                            

. possible alternative means of achieving the anticipated benefits of the   
merger, including the possibility of a combination with other companies 
and possible strategic alliances that would not involve a combination,  
and internal development of new products and services, including the    
feasibility of these alternatives, their potential timing and resource  
requirements;                                                           

. the consideration MAYAN shareholders will receive in the merger in light  
of comparable merger transactions;                                      

. the belief that the terms of the merger agreement and related agreements  
are reasonable;                                                         

. MAYAN's management's view as to the integration of Ariel;                 

. reports from MAYAN's management and advisors as to the results of their   
due diligence investigations of Ariel;                                  

. the treatment of the convertible notes in the merger;                     

. the expectation that the merger would be accounted for as a purchase; and 

. the analyses and presentations prepared by Robertson Stephens and         
Robertson Stephens' written opinion to the effect that, as of March 28, 
 2001, and subject to the various considerations set forth in its opinion,
 the exchange ratio was fair from a financial point of view to the holders
of MAYAN common stock.                                                  

 The disinterested members of MAYAN's board also identified and considered a
number of potentially negative factors in its deliberations concerning the      
merger including the following:                                                 

. the risk that the potential benefits of the merger (including expected    
synergies and cost savings) may not be realized;                        

. the need to achieve significant cost reductions in order for the combined 
company to realize the potential benefits of the merger and to become   
profitable;                                                             

. the reduction of MAYAN's cash balances as a result of loans to Ariel      
under the bridge loan;                                                  

. the risk that MAYAN and Ariel would not be able to integrate their        
respective products, technology and organizations;                      

. the possibility that the merger may not be approved by the shareholders   
of one or both companies, or that even if it is approved, the merger may
not be completed;                                                       

. the risk that if the merger is not completed, MAYAN would have made loans 
to Ariel, and would have incurred other significant costs in            
 contemplation of the merger, and that these actions could weaken it as an
independent company if the merger were not completed;                   

. the impact of the merger on MAYAN's convertible promissory notes;         

. Ariel's cash position and lack of prospects to obtain funding;            

. the risk of management and employee disruption associated with the        
merger, including the risk that despite the efforts of the combined     
company, key technical, sales and management personnel might not remain 
employed by the combined company;                                       

. the challenges of integrating Ariel's operations in New Jersey, France    
and Germany with MAYAN's operations in California, Texas and Arizona and
the related challenges of conducting multi-site operations in several   
states and countries;                                                   

. the risk that the merger could adversely affect MAYAN's or Ariel's        
relationships with customers and strategic partners; and                

. the other applicable risks described in this document under the heading   
"Risk Factors."                                                         

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The disinterested members of MAYAN's board concluded, however, that, on         
balance, the merger's potential benefits to MAYAN and its shareholders          
outweighed the associated risks. This discussion of the information and factors 
considered by the disinterested members of MAYAN's board is not exhaustive. In  
view of the variety of factors considered in connection with its evaluation of  
the merger, MAYAN's board did not find it practicable to, and did not quantify  
or otherwise assign relative weight to, the specific factors considered in      
reaching its determination.                                                     

 For the Reasons Discussed Above, the Disinterested Members of MAYAN'S Board
of Directors Unanimously Have Approved the Merger Agreement and the Merger and  
Have Determined That the Merger is Advisable and in the Best Interests of MAYAN 
and its Shareholders and Unanimously Recommend That MAYAN Shareholders Vote For 
Approval of the Merger Agreement.                                               

Opinion of MAYAN's Financial Advisor                                            

Under a letter agreement dated March 13, 2001, MAYAN engaged Robertson    
Stephens to render an opinion as to the fairness of the exchange ratio, from a  
financial point of view, to the holders of MAYAN common stock.                  

In connection with the evaluation and approval by the special committee of
the merger agreement and the merger, Robertson Stephens delivered a written     
opinion, dated March 28, 2001, that as of that date and based on the matters    
considered and the limitations on the review undertaken described in the        
opinion, the exchange ratio was fair, from a financial point of view, to the    
holders of MAYAN common stock. Robertson Stephens has consented to the use of   
its opinion in this document, and the full text of this opinion is attached as  
Appendix VIII to this document. No limitations were imposed by MAYAN's board of 
directors or the special committee on Robertson Stephens with respect to the    
investigations made or procedures followed by it in furnishing its opinion. The 
exchange ratio was determined through negotiations between the managements of   
MAYAN and Ariel. Robertson Stephens was not asked by MAYAN to propose or        
recommend, and did not propose or recommend, any specific exchange ratio for    
the merger.                                                                     

  You should consider the following when reading the discussion of the opinion
of Robertson Stephens in this document:                                         

. We urge you to read carefully the entire opinion of Robertson Stephens,   
which is set forth in Appendix VIII to this document and which we       
incorporate by reference.                                               

. The following description of the Robertson Stephens opinion is qualified  
by reference to the full opinion attached as Appendix VIII to this      
document. The full opinion sets forth, among other things, the          
 assumptions made by Robertson Stephens, the matters it considered and the
limitations on the review undertaken.                                   

. The Robertson Stephens opinion was provided for the information of the    
special committee in connection with its evaluation of the merger. The  
Robertson Stephens opinion is not intended to be and does not constitute
a recommendation to any shareholder of MAYAN as to how to vote, or take 
any other action, with respect to the merger. This opinion may not be   
summarized, described or referred to or furnished to any party except   
with Robertson Stephens' express prior written consent.                 

. Robertson Stephens' opinion does not address the relative merits of the   
merger and the other business strategies that the special committee or  
the MAYAN board of directors has considered or may be considering, nor  
does it address the decision of the special committee or the MAYAN board
of directors to proceed with the merger.                                

It should be understood that subsequent developments may affect the       
conclusion expressed in the Robertson Stephens opinion and that Robertson       
Stephens disclaims any undertaking or obligation to advise any person of any    
change in any matter affecting its opinion which may come or be brought to its  
attention after the                                                             

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date of its opinion. Its opinion is limited to the fairness, from a financial   
point of view as of March 28, 2001, to the holders of MAYAN common stock, of    
the exchange ratio.                                                             

In connection with the preparation of its opinion, Robertson Stephens has,
among other things:                                                             

. reviewed publicly available financial statements and other business and   
financial information of Ariel;                                         

. reviewed internal financial statements and other financial and operating  
data, including financial forecasts and other forward looking           
 information, concerning (a) MAYAN prepared by the management of MAYAN and
(b) Ariel prepared by the managements of Ariel and MAYAN, respectively; 

. held discussions with the respective managements of MAYAN and Ariel       
concerning the businesses, past and current operations, financial       
 condition and future prospects of both MAYAN and Ariel, independently and
combined, including discussions with the management of MAYAN and Ariel  
concerning their views regarding the strategic rationale for the merger;

. reviewed the financial terms and conditions set forth in a draft, dated   
March 27, 2001, of the merger agreement;                                

. reviewed the stock price and trading history of Ariel common stock;       

. compared the financial performance of MAYAN and Ariel and the prices and  
 trading activity of Ariel common stock with that of other publicly traded
companies comparable with MAYAN and Ariel, respectively;                

. compared the financial terms of the merger with the financial terms, to   
the extent publicly available, of other transactions that it deemed     
relevant;                                                               

. reviewed the pro forma impact of the merger on MAYAN's revenue per share  
and cash earnings per share;                                            

. prepared an analysis of the relative contributions of MAYAN and Ariel to  
the combined company; and                                               

. made other studies and inquiries, and reviewed other data, as it deemed   
relevant.                                                               

In its review and analysis, and in arriving at its opinion, Robertson     
Stephens assumed and relied upon the accuracy and completeness of all of the    
financial and other information provided to it, including information furnished 
to it orally or otherwise discussed with Robertson Stephens by the managements  
of MAYAN and Ariel, or publicly available and neither attempted to verify, nor  
assumed responsibility for verifying, any of that information. Robertson        
Stephens relied upon the assurances of the managements of MAYAN and Ariel that  
they were not aware of any facts that would make that information inaccurate or 
misleading. Furthermore, Robertson Stephens did not obtain or make, or assume   
any responsibility for obtaining or making, any independent evaluation or       
appraisal of the properties, assets or liabilities, contingent or otherwise, of 
MAYAN or Ariel, nor was Robertson Stephens furnished with any evaluation or     
appraisal of the properties, assets or liabilities, contingent or otherwise, of 
MAYAN or Ariel.                                                                 

  With respect to the financial forecasts and projections, and the assumptions
and bases on which they are founded, for Ariel and MAYAN, including projections 
with respect to operations of the combined companies following the merger, that 
Robertson Stephens reviewed, Robertson Stephens assumed that:                   

. these forecasts and projections were reasonably prepared in good faith on 
the basis of reasonable assumptions;                                    

. these forecasts reflected the best currently available estimates and      
judgments of the managements of Ariel and MAYAN;                        

. these forecasts reflected the best currently available estimates and      
judgments of the managements of Ariel and MAYAN as to the future        
financial condition and performance of MAYAN and Ariel; and             

. Robertson Stephens further assumed that the projections and forecasts     
would be realized in the amounts and in the time periods estimated.     

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The Robertson Stephens opinion is based on market, economic and other           
conditions as they existed or were disclosed to Robertson Stephens and could be 
evaluated as of the date of the Robertson Stephens opinion and made available   
to Robertson Stephens on that date. In addition, Robertson Stephens assumed     
that:                                                                           

. the merger will be consummated upon the terms set forth in the draft      
agreement without material alteration, including, among other things,   
that the merger will be accounted for as a purchase business combination
in accordance with U.S. generally accepted accounting principles;       

. the merger will be treated as a tax-free reorganization pursuant to the   
Internal Revenue Code of 1986, as amended; and                          

. the historical financial statements of each of MAYAN and Ariel reviewed   
by Robertson Stephens have been prepared and fairly presented in        
accordance with U.S. generally accepted accounting principles           
consistently applied.                                                   

Robertson Stephens expressed no opinion as to:                                  

. the value of any employee agreement or other arrangement entered into in  
connection with the merger;                                             

. any tax or other consequences that might result from the merger; or       

. what the value of Ariel common stock will be when issued to MAYAN's       
shareholders pursuant to the merger or the price at which the shares of 
Ariel common stock that are issued pursuant to the merger may be traded 
in the future. The Robertson Stephens opinion does not address the      
relative merits of the merger and the other business strategies that the
special committee of the MAYAN board of directors has considered or may 
 be considering, nor does it address the decision of the special committee
to proceed with the merger.                                             

The following is a summary of the material financial analyses performed by
Robertson Stephens in connection with rendering its opinion. The summary of the 
financial analyses is not a complete description of all of the analyses         
performed by Robertson Stephens. Certain of the information in this section is  
presented in tabular form.                                                      

 In order to understand better the financial analyses performed by Robertson
Stephens, these tables must be read together with the text of each summary. The 
Robertson Stephens opinion is based on the totality of the various analyses     
that it performed, and no particular portion of the analyses has any merit      
standing alone.                                                                 

Comparable Company Analysis                                                   

Using publicly available information, Robertson Stephens analyzed, among  
other things, the trading multiples of selected optical equipment companies,    
including:                                                                      

                                                                [Download Table]
                                                                     
. Nortel Networks                                 .ONI Systems       
. Alcatel--Alsthom                                .Sycamore Networks 
. Lucent Technologies                             .Corvis Corporation
. Ciena                                           .Redback Networks  

  As set forth in the following table, applying a range of multiples for these
companies to calendar year 2002 revenue estimates for MAYAN resulted in the     
following range of implied equity values for MAYAN:                             

Implied MAYAN Equity Value
(Dollar Amounts In Millions)

                                                                [Download Table]

         Multiple      Implied   
Revenue    Range    Equity Value 
-------  --------   ------------ 
                                 
 2002    2.3x-3.9x  $111.2-$189.6

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Also, using publicly available information, Robertson Stephens analyzed,  
among other things, the trading multiples of selected next generation access    
companies, including:                                                           

                                                                [Download Table]
                                                                     
. Netro Corporation                               .Digi International
. Terayon                                         .Paradyne          
. Copper Mountain                                 .Tut Systems       
. Carrier Access                                  .Com21             

  As set forth in the following table, applying a range of multiples for these
companies to calendar year 2002 revenue estimates for Ariel resulted in the     
following range of implied equity values for Ariel:                             

Implied Ariel Equity Value
(Dollar Amounts In Millions)

                                                                [Download Table]

                      Implied  
         Multiple     Equity   
Revenue    Range       Value   
-------  --------     -------  
                               
 2002    0.3x-0.5x  $11.8-$20.4

The above implied equity values for MAYAN and Ariel were used to compute a
range of 1.5x to 4.5x for an implied exchange ratio as compared to the proposed 
exchange ratio of 3.333x.                                                       

Selected Precedent Transaction Analysis                                       

  Robertson Stephens analyzed the adjusted aggregate value paid or proposed to
be paid in selected precedent transactions for next generation access           
companies, including:                                                           

. Efficient Networks/Siemens                                                

. CommTech/ADC Telecommunications                                           

. Future Networks/Tellabs                                                   

. Ramp Networks/Nokia                                                       

. Accord Networks/Polycom                                                   

. Woodwind Communications Systems/VINA Technologies                         

. Multimedia Development Corp./Efficient                                    

. IPCell & Vovida Networks/Cisco Systems                                    

. Mariposa Technology/Marconi PLC                                           

. Broadband Access/ADC Telecom                                              

. Sonoma Systems/Nortel Networks                                            

. Millennia Systems/Carrier Access                                          

. Mainsail Networks/Terayon Communication                                   

. HyNEX Ltd./Cisco Systems                                                  

. Network TeleSystems/Efficient                                             

. ACT Networks/Clarent                                                      

. GVN Technologies/Advanced Fibre Communications                            

. NetScreen Technologies /Efficient Networks                                

. Ultracom Communications Holdings/Terayon                                  

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. PairGain Technologies/ADC Telecommunications                              

. Combox/Terayon                                                            

. OnPrem/Copper Mountain                                                    

. Promatory Communications/Nortel Networks                                  

. Teltrend/Westel Technologies                                              

. Siara Systems/Redback Networks                                            

. Flowpoint (Cabletron)/Efficient Networks                                  

. Premisys Communications/Zhone Technologies                                

. Telegate Ltd./Terayon                                                     

. Cocom A/S / Cisco Systems                                                 

. Rooftop Communications/Nokia                                              

. Xedia/Lucent Technologies                                                 

. Pathway/ADC Telecommunications                                            

. Rascom/Excel Switching Corp.                                              

. Assured Access/Alcatel                                                    

. RELTEC Corp./GEC                                                          

. Diamond Lane/Nokia                                                        

Robertson Stephens compared, among other things, total adjusted enterprise
value in these transactions as a multiple of LTM (last twelve months) and NTM   
(next twelve months) revenue and premium to market price of common stock one    
day before announcement. Applying these multiples to Ariel's LTM and NTM        
revenue, respectively, resulted in the following range of implied equity        
values.                                                                         

Implied Ariel Equity Value
(Dollar Amounts in Millions)

                                                                [Download Table]

                                                     Multiple    Implied   
Revenue                                                Range   Equity Value
-------                                              --------- ------------
                                                                           
LTM Revenue......................................... 3.9x-6.5x $31.7-$ 53.6
NTM Revenue......................................... 2.9x-4.8x $74.6-$125.2

Robertson Stephens also analyzed the premium the day prior to announcement
of the transaction in the precedent transactions.                               

Implied Ariel Equity Value
(Dollar Amounts in Millions)

                                                                [Download Table]

                                                       Premium   Implied   
Stock Price                                             Range  Equity Value
-----------                                            ------- ------------
                                                                           
1 Day Prior (3/27/01)................................. 30%-50% $22.4-$25.9 

The above implied equity values were used to compute a range of implied   
exchange ratios of 0.6x-1.7x for LTM Revenue Analysis, 0.2x-0.7x for NTM        
Revenue Analysis and 1.2x-2.3x for One Day Premium to Market Analysis as        
compared to the proposed exchange ratio of 3.333x.                              

 No company, transaction or business used in the comparable company analysis
or the selected precedent transaction analysis is identical to MAYAN, Ariel or  
the merger. Accordingly, an analysis of the results of the                      

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foregoing is not entirely mathematical; rather it involves complex              
considerations and judgments concerning differences in financial and operating  
characteristics and other factors and trends that could affect the acquisition, 
public trading and other values of the comparable companies or the business     
segment, company or transactions to which they are compared.                    

Contributions Analysis                                                        

 Robertson Stephens analyzed the respective contributions of Ariel and MAYAN
to the estimated revenue and gross profit of the combined company for fiscal    
years 2002 and 2003. Also, Robertson Stephens analyzed the respective           
contributions of Ariel and MAYAN to the assets of the combined company as of    
June 30, 2001. The actual results achieved by the combined company may vary     
from projected results and the variations may be material.                      

                                                                [Download Table]

                                                    MAYAN's      Ariel's   
                                                  Contribution Contribution
                                                  to Combined  to Combined 
                                                   Company's    Company's  
                                                   Estimated    Estimated  
Year                                                Revenue      Revenue   
----                                              ------------ ------------
                                                                           
FY2002E..........................................    37.9%        62.1%    
FY2003E..........................................    64.9%        35.1%    

                                                                [Download Table]

                                                    MAYAN's      Ariel's   
                                                  Contribution Contribution
                                                  to Combined  to Combined 
                                                   Company's    Company's  
Year                                              Gross Profit Gross Profit
----                                              ------------ ------------
                                                                           
FY2002E..........................................    35.3%        64.7%    
FY2003E..........................................    67.8%        32.2%    

                                                                [Download Table]

                                                    MAYAN's      Ariel's   
                                                  Contribution Contribution
                                                  to Combined  to Combined 
                                                   Company's    Company's  
At                                                   Assets       Assets   
--                                                ------------ ------------
                                                                           
June 30, 2001....................................     91.1%        8.9%    

While this summary describes the analysis and factors that Robertson      
Stephens deemed material in its presentation to the special committee, it is    
not a comprehensive description of all analyses and factors considered by       
Robertson Stephens. The preparation of a fairness opinion is a complex process  
that involves various determinations as to the most appropriate and relevant    
methods of financial analysis to the particular circumstances. Therefore, a     
fairness opinion is not readily susceptible to partial analysis or summary      
description. In arriving at its opinion, Robertson Stephens did not attribute   
any particular weight to any analysis or factor considered by it, but rather    
made qualitative judgments as to the significance and relevance of each         
analysis and factor. Accordingly, Robertson Stephens believes that its analyses 
must be considered as a whole and that selecting portions of its analyses and   
of the factors considered by it, without considering all analyses and factors,  
could create a misleading or incomplete view of the evaluation process          
underlying its opinion. Several analytical methodologies were employed and no   
one method of analysis should be regarded as critical to the overall conclusion 
reached by Robertson Stephens. Each analytical technique has inherent strengths 
and weaknesses, and the nature of the available information may further affect  
the value of particular techniques. The conclusion reached by Robertson         
Stephens is based on all analyses and factors taken as a whole and also on      
application of Robertson Stephens' own experience and judgment. This conclusion 
may involve significant elements of subjective judgment and qualitative         
analysis. Robertson Stephens therefore gives no opinion as to the value or      
merit standing alone of any one or more parts of the analysis it performed.     

In performing its analyses, Robertson Stephens made numerous assumptions  
with respect to industry performance, general business and other conditions and 
matters, and industry and transaction trends, many of                           

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which are beyond the control of MAYAN or Robertson Stephens. Any estimates      
contained in these analyses are not necessarily indicative of actual values or  
predictive of future results or values, which may be significantly more or less 
favorable than those suggested by these analyses. Accordingly, analyses         
relating to the value of businesses do not purport to be appraisals or to       
reflect the prices at which these businesses actually may be sold in the        
future, and these estimates are inherently subject to uncertainty. Furthermore, 
no opinion is being expressed as to the prices at which shares of MAYAN's or    
Ariel's common stock may be traded at any future time.                          

MAYAN engaged Robertson Stephens under a letter agreement dated March 13, 
2001. The agreement provides that, for its services, Robertson Stephens is      
entitled to receive a fee, which was payable upon the delivery of its opinion   
and an additional fee upon consummation of the merger. In addition, MAYAN has   
agreed to indemnify Robertson Stephens for certain liabilities that may arise   
out of the engagement. The terms of the fee arrangement with Robertson Stephens 
were negotiated at arm's-length between MAYAN and Robertson Stephens, and the   
special committee and the MAYAN board of directors was aware of these fee       
arrangements. Robertson Stephens was retained based on Robertson Stephens'      
experience in connection with mergers and acquisitions and in securities        
valuations generally, as well as Robertson Stephens' investment banking         
relationship and familiarity with MAYAN. Robertson Stephens may in the future   
provide investment banking or other financial advisory services to MAYAN or     
Ariel. In the ordinary course of business, Robertson Stephens acts as a market  
maker and broker in the publicly traded securities of MAYAN and Ariel and       
receives customary compensation in connection therewith. In the ordinary course 
of business, Robertson Stephens actively trades in the equity and derivative    
securities of MAYAN and Ariel for its own account and for the accounts of its   
customers and, accordingly, may at any time hold a long or short position in    
those securities. Robertson Stephens acted as the placement agent for MAYAN's   
sale of $75,000,000 of convertible subordinated securities on October 20, 2000. 
Pursuant to Robertson Stephens' role as placement agent and market maker in     
those securities, as of the date of the opinion, Robertson Stephens held a      
portion of those securities worth approximately $5,000,000.                     

  Robertson Stephens is an internationally recognized investment banking firm.
As part of its investment banking business, Robertson Stephens is frequently    
engaged in the valuation of businesses and their securities in connection with  
mergers and acquisitions, negotiated underwritings, secondary distributions of  
securities, private placements and other purposes.                              

Interests of MAYAN's Management in the Merger and Potential Conflicts of        
Interest                                                                        

Esmond Goei, Chief Executive Officer and director of MAYAN, who is also   
currently serving as Vice-Chairman of Ariel's board of directors, beneficially  
owns, or has the right to acquire,       shares of Ariel common stock, after    
giving effect to the one for     reverse stock split which is expected to occur 
immediately prior to the effective time of the merger, and 1,835,670 shares of  
MAYAN capital stock. Mr. Goei has abstained from voting on all proposals with   
respect to the merger.                                                          

As of March 31, 2001, the executive officers and directors of MAYAN and   
their affiliates collectively beneficially owned an aggregate of 5,620,500      
shares of MAYAN common stock and 20,036,145 shares of MAYAN preferred stock.    
Additionally, as of March 31, 2001, the executive officers and directors of     
MAYAN held options to purchase an aggregate of 1,828,170 shares of MAYAN common 
stock. Upon consummation of the merger, it is anticipated that the directors    
and officers of MAYAN and their affiliates will beneficially own approximately  
48% of the then outstanding shares of Ariel common stock, calculated on the     
basis set forth under the heading "Principal Stockholders of MAYAN," assuming   
that all options and warrants to purchase MAYAN common stock and all options    
and warrants to purchase Ariel common stock are exercised and excluding shares  
of common stock issuable upon the conversion of $75,000,000 in convertible      
promissory notes issued by MAYAN which may convert to Ariel common stock        
following the merger. See "Principal Stockholders of MAYAN" for a description   
of the outstanding MAYAN stock options that will become Ariel stock options     
upon consummation of the merger.                                                

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The merger agreement provides that Esmond Goei and John Tingleff, Chief   
Financial Officer of MAYAN, will be appointed as Chief Executive Officer and    
Chief Financial Officer, respectively, of Ariel following the merger, and will  
be entitled to serve in those offices from the effective time of the merger     
until their successors shall be duly appointed and qualified.                   

The merger agreement also provides that Esmond Goei, Thomas Edrington,    
Steven Krausz, Jim Mongiello and Peter Morris, all members of the board of      
directors of MAYAN, will be elected to Ariel's board of directors following the 
merger, and will be entitled to serve from the effective time of the merger     
until their successors shall be duly elected and qualified.                     

Ariel has agreed to indemnify present and former officers and directors of
MAYAN against any costs or expenses, judgments, fines, losses, claims, damages  
or liabilities arising out of or pertaining to matters relating to their        
service as an officer or director existing or occurring at or prior to the      
effective time (including, without limitation, the transactions contemplated by 
the merger agreement) whether asserted or claimed prior to, at or after the     
effective time, to the fullest extent that MAYAN would have been permitted      
under applicable law and its articles of incorporation and bylaws. The merger   
agreement provides that all rights to indemnification for present and former    
officers and directors of MAYAN shall survive the merger and continue in full   
force and effect for a period of not less than six years from the effective     
time. Ariel also has agreed to maintain insurance for MAYAN's directors and     
officers equivalent to MAYAN's current directors' and officers' liability       
insurance for not less than six years after the effective time, subject to      
limitations.                                                                    

 As a result of the foregoing, the directors and executive officers of MAYAN
may be more likely to approve the merger than MAYAN shareholders generally.     

Interests of Ariel's Management in the Merger and Potential Conflicts of        
Interest                                                                        

As a condition to completion of the merger, executive officers and key    
employees of Ariel are required to sign employment agreements with the combined 
company, effective only upon completion of the merger, that include             
compensation and proposed options to purchase shares of Ariel common stock.     
Under the employment agreements, the executive officers and key employees agree 
to waive acceleration benefits with respect to options held pursuant to their   
prior employment or severance agreements or pursuant to the 1995 Stock Option   
Plan with Ariel and refrain from competing with the combined company for a      
period of one year following termination of employment, and will, upon          
termination without cause, receive 3 to 6 months of severance pay as well as an 
additional one to two years of vesting of the shares of Ariel common stock      
issuable upon exercise of Ariel stock options, based upon the date of the       
termination. As of March 28, 2001, these executive officers and key employees   
held        shares of Ariel common stock, after giving effect to the one for    
reverse stock split which is expected to occur immediately prior to the 
effective time of the merger, which represents approximately 12.1% of the       
outstanding shares of Ariel common stock.                                       

Additionally, Dennis Schneider, President, Chief Executive Officer and    
director of Ariel, has agreed to enter into an employment agreement with the    
combined company pursuant to which Mr. Schneider will become the Senior Vice    
President of Marketing of the combined company following the merger. Under Mr.  
Schneider's employment agreement, Mr. Schneider agrees to waive the             
acceleration benefits on his stock options (with respect to this merger only)   
under his existing employment agreement with Ariel and refrain from competing   
with the combined company for a period of one year following termination of     
employment. Additionally, upon an involuntary termination without cause, Mr.    
Schneider will receive 6 months of severance pay.                               

The Merger                                                                      

MAYAN will merge with and into Ariel following:                           

. the approval of each of the proposals submitted at the Ariel special      
meeting; and                                                            

. the satisfaction or waiver of the other conditions to the merger.         

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Ariel will be the surviving corporation following the merger and Ariel's  
name will be changed to MAYAN Networks Corporation. This surviving corporation  
will combine all of the assets and liabilities of MAYAN with all the assets and 
liabilities of Ariel. Additionally, the MAYAN shareholders, option holders and  
warrant holders will own approximately 90% of the issued and outstanding equity 
securities of the combined company, excluding shares of common stock issuable   
upon the conversion of $75,000,000 in convertible promissory notes issued by    
MAYAN which may convert to Ariel common stock following the merger pursuant to  
the terms of the convertible promissory notes and related indenture. Ariel      
stockholders, option holders and warrant holders, assuming all outstanding      
options and warrants are exercised, will retain control of approximately 10% of 
the combined company.                                                           

The merger will be accounted for under the purchase method. Because MAYAN 
will own approximately 90% of the common stock of Ariel (on a diluted basis)    
after the merger, the merger will be accounted for as a reverse acquisition     
which results in MAYAN being the acquirer of Ariel for accounting purposes.     

Closing                                                                         

At the closing of the merger, the parties will cause the merger to become 
effective by filing a certificate of merger with the Secretary of State of the  
State of Delaware and an agreement of merger with the Secretary of the State of 
California. Ariel and MAYAN are working toward completing the merger as soon as 
possible and hope to complete the merger by the third calendar quarter of 2001. 
Because the merger is subject to a number of conditions, however, we cannot     
predict the exact timing.                                                       

Ariel Name Change                                                               

  The Ariel board has also determined that because of the MAYAN name and brand
and product marketing, it is in the best interest of the combined company that  
its name be changed from Ariel to "MAYAN Networks Corporation." If Ariel's      
stockholders approve the merger agreement and the merger is effected, Ariel's   
name will automatically be changed to "MAYAN Networks Corporation."             

Conversion of MAYAN Stock in the Merger                                         

At the effective time, each issued and outstanding shares of MAYAN common 
stock, other than shares held in the treasury of MAYAN, will be converted into  
shares of Ariel common stock in accordance with the formula described below.    
MAYAN shareholders will also receive cash, without interest, for any fractional 
shares of Ariel common stock they would otherwise receive in the merger.        

For purposes of the information in this document, we have assumed that the
holders of MAYAN Series A, B, C and D preferred stock will vote in favor of     
voluntary conversion of their shares into MAYAN common stock immediately prior  
to the effectiveness of the merger pursuant to Article III, Section B(4)(b)(ii) 
of MAYAN's Amended and Restated Articles of Incorporation, pursuant to which    
each series of MAYAN preferred stock will automatically convert into common     
stock if holders of at least a majority of each series consent to the           
conversion. It is a condition to the obligations of MAYAN at the closing that   
the conversion of preferred stock occur immediately prior to the closing.       

  At the effective time of the merger, the MAYAN shareholders will be entitled
to receive that number of shares of Ariel common stock equal to:                

(i)          shares of Ariel common stock, after giving effect to the 
one for    reverse stock split which is expected to occur immediately prior 
to the effective time of the merger, which number will be increased in the  
event that Ariel's third party expenses in connection with the merger       
exceed $750,000 and proportionately adjusted as appropriate for any other   
stock split, stock dividend or similar event with respect to MAYAN common   
stock or Ariel common stock effected between the date of this document and  
the completion of the merger, divided by                                    

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(ii) the aggregate number of shares of MAYAN common stock which are   
outstanding immediately prior to the effective time (including all shares   
of MAYAN common stock issued or issuable upon conversion of all shares of   
MAYAN preferred stock and upon exercise, conversion or exchange in full or  
all unvested and vested MAYAN stock options and MAYAN warrants which remain 
outstanding and are not exercised, converted, exchanged or expired as of    
the effective time, excluding the outstanding convertible subordinated      
promissory notes).                                                          

As of March 28, 2001, the date of the signing of the merger agreement, the
aggregate number of shares of MAYAN common stock and preferred stock            
outstanding (including all shares of MAYAN common stock issued or issuable upon 
conversion of all shares of MAYAN preferred stock and upon exercise, conversion 
or exchange in full of all unvested and vested MAYAN stock options and MAYAN    
warrants which remain outstanding and are not exercised, converted, exchanged   
or expired as of the effective time, excluding the outstanding convertible      
subordinated promissory notes), equaled approximately 49,798,507 shares. As a   
result, on that date, the MAYAN shareholders would have been entitled to        
receive       shares of Ariel common stock after giving effect to the one for   
reverse stock split which is expected to occur immediately prior to the   
effective time of the merger.                                                   

If, prior to the effective time of the merger, the outstanding shares of  
Ariel common stock are changed into or exchanged for a different number of      
shares or a different class as a result of any other stock split, combination,  
reclassification or dividend, the nature of the consideration to be received by 
the holders of MAYAN capital stock and the exchange ratios will be              
appropriately and proportionately adjusted.                                     

MAYAN Stock Options and Warrants                                                

At the effective time, each outstanding option to purchase shares of MAYAN
common stock issued under MAYAN's 1998 Employee Stock Option/Stock Purchase     
Plan, and all other options to purchase MAYAN's common stock and warrants to    
purchase MAYAN's common stock as of the date of the merger will be assumed by   
Ariel, regardless of whether the options and warrants are then exercisable, and 
converted into options and warrants to purchase Ariel common stock. Each        
assumed MAYAN stock option and warrant will constitute an option or warrant to  
acquire, on the same terms and conditions that were applicable to the option    
immediately prior to the effective time, that number of shares of Ariel common  
stock equal to the number of shares of MAYAN common stock purchasable pursuant  
to that option or warrant multiplied by the common stock exchange ratio as      
described above and rounding any fractional share down to the nearest whole     
number, at a price per share, rounded up if necessary to the next whole cent,   
equal to the aggregate exercise price for the shares of MAYAN common stock      
purchasable pursuant to that MAYAN stock option or warrant immediately prior to 
the effective time divided by the number of full shares of Ariel common stock   
deemed purchasable pursuant to that MAYAN stock option or warrant in accordance 
with the foregoing. The duration and other terms of that Ariel option or        
warrant, including the vesting schedule, will be the same as the prior MAYAN    
stock option or warrant.                                                        

The parties intend for the MAYAN stock options assumed by Ariel to qualify
as incentive stock options to the extent the stock options qualified as         
incentive stock options prior to the effective time.                            

MAYAN Convertible Subordinated Promissory Notes and Exchange Offer              

On May 22, 2001 MAYAN commenced an offering of up to $50.0 million in     
aggregate principal amount of new 7 7/8% Convertible Subordinated Notes due     
2005, for up to $75.0 million in aggregate principal amount of 5 1/4%           
Convertible Subordinated Notes due 2005, or existing notes, to holders of       
record as of May 21, 2001, which consists of approximately 15 holders who MAYAN 
understands are qualified institutional buyers. The offer will remain open      
until June 21, 2001, unless extended by MAYAN. MAYAN is offering to exchange    
$2,000 in principal amount of exchange notes for each $3,000 in principal       
amount of existing notes. Holders may tender all, some or none of their         
existing notes. The exchange notes will be convertible at any time prior to     
maturity. Before the closing of the merger with Ariel (or alternative mergers), 
the exchange notes will be                                                      

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convertible into shares of MAYAN's common stock at an initial conversion price  
of $5.00 per share of MAYAN common stock, subject to adjustments. If the merger 
with Ariel closes, the outstanding exchange notes will, upon such closing,      
become convertible at any time thereafter into shares of Ariel common stock at  
an initial conversion price per share equal to $1.50 multiplied by a fraction   
in inverse proportion to the proportion of the reduction in the number of       
shares of Ariel common stock resulting from the reverse stock split in Ariel    
shares provided for in the merger agreement, subject to adjustments. If MAYAN   
has not, on or before December 31, 2001, closed the merger with Ariel (or an    
alternative transaction), then holders will have the right to exercise, at      
their option, an election under the exchange notes indenture to have their      
exchange notes, effective as of January 31, 2002, automatically convert into    
notes governed by alternative terms provided for under the exchange notes       
indenture that are substantially the same as the terms applicable to the        
existing notes. These alternative terms will provide for payment of unpaid      
interest on the conversion date accrued to such date at 7 7/8% per year and for 
interest thereafter to accrue at 5 1/4% per year and will also provide for the  
principal amount of the converted exchange notes to be deemed to increase,      
effective as of the conversion date, to $3,000 per $2,000 in face amount of     
converted exchange notes.                                                       

  If the event of a (i) change in control of Ariel after the merger with MAYAN
or (ii) a delisting of Ariel's common stock (after the merger with MAYAN), the  
holders of the exchange notes may require Ariel after the merger with MAYAN to  
repurchase the exchange notes at 105% of the principal amount plus accrued and  
unpaid interest. In addition, prior to the earlier of (i) 90 days following the 
effective date of a shelf registration statement covering a resale of the       
exchange notes and common stock into which the exchange notes are convertible   
following the merger with Ariel, (ii) the closing of an alternative merger or   
(iii) January 10, 2002, if at the close of business on December 31, 2001 MAYAN  
has not closed the merger with Ariel, the holders of the exchange notes may     
require the repurchase of the exchange notes at 37.5% of the principal amount   
plus accrued and unpaid interest. This repurchase option could require MAYAN,   
or Ariel after the merger with MAYAN, to make a cash payment of up to           
approximately $18,750,000 to repay the exchange notes and will result in the    
exchange notes being classified as a current liability on MAYAN's balance sheet 
(or Ariel's balance sheet after the merger with MAYAN) until this repurchase    
option expires.                                                                 

The Exchange Agent                                                              

 As of the effective time, Ariel is required to deposit with a bank or trust
company certificates representing the shares of Ariel common stock to be        
exchanged for shares of MAYAN common stock and cash to pay for any dividends or 
distributions that holders of MAYAN common stock may be entitled to receive     
under the merger agreement.                                                     

Exchange of MAYAN Stock Certificates for Ariel Stock Certificates               

Promptly after the effective time, the exchange agent will mail to MAYAN  
shareholders a letter of transmittal and instructions for surrendering their    
MAYAN stock certificates in exchange for Ariel stock certificates.              

MAYAN shareholders should not submit their stock certificates for exchange
until they have received the letter of transmittal and instructions referred to 
above.                                                                          

Transfer of Ownership; Distributions with Respect to Unexchanged Shares         

Ariel will issue an Ariel stock certificate in a name other than the name 
registered for the surrendered MAYAN stock certificate only if the exchange     
agent is given all documents required                                           

. to show and effect the unrecorded transfer of ownership; and              

. to show that any applicable stock transfer taxes have been paid.          

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 If there is any dividend or other distribution on Ariel common stock with a
record date after the merger, former MAYAN shareholders will receive, only      
following surrender of their MAYAN stock certificates, the dividend or other    
distribution payable with respect to the whole shares of Ariel common stock     
issued in exchange for their MAYAN stock certificates.                          

Representations and Warranties                                                  

 MAYAN and Ariel each made a number of representations and warranties in the
merger agreement about their authority to enter into the merger agreement and   
to consummate the other transactions contemplated by the merger agreement and   
about aspects of their business, financial condition, structure and other facts 
pertinent to the merger.                                                        

MAYAN made representations addressing the following topics:               

. MAYAN's organization, qualification to do business and good standing;     

. MAYAN's capitalization;                                                   

. the effect of the merger agreement and the merger on obligations of       
MAYAN;                                                                  

. inapplicability of governmental consents and approvals in connection with 
the merger;                                                             

. MAYAN's financial statements and the absence of undisclosed liabilities;  

. litigation involving MAYAN;                                               

. tax matters regarding the merger;                                         

. MAYAN's affiliates; and                                                   

. the registration statement and joint proxy/prospectus.                    

Ariel's representations and warranties addressed, among other things, the 
following topics:                                                               

. Ariel's organization, qualification to do business and good standing;     

. Ariel's capitalization;                                                   

. the effect of the merger agreement and the merger on obligations of       
Ariel;                                                                  

. inapplicability of governmental consents and approvals in connection with 
the merger;                                                             

. Ariel's filings and reports with the Securities and Exchange Commission;  

. Ariel's financial statements and the absence of undisclosed liabilities;  

. changes in Ariel's business since December 31, 2000;                      

. matters relating to Ariel's employees and employee benefit plans;         

. Ariel's material contracts and obligations;                               

. litigation involving Ariel;                                               

. environmental laws that apply to Ariel;                                   

. tax matters regarding the merger;                                         

. intellectual property used or owned by Ariel;                             

. Ariel's insurance;                                                        

. Ariel's properties;                                                       

. Ariel's current rights plan;                                              

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. Ariel's business practices;                                               

. Ariel's books and records;                                                

. the delivery of a fairness opinion from Ariel's financial advisor;        

. Ariel's affiliates; and                                                   

. the registration statement and joint proxy/prospectus.                    

The representations and warranties in the merger agreement are complicated
and not easily summarized. We urge stockholders to read carefully the articles  
in the merger agreement entitled "Representations and Warranties of MAYAN" and  
"Representations and Warranties of Ariel."                                      

Ariel's and MAYAN's Conduct of Business Before Completion of the Merger         

Ariel has agreed that, until the completion of the merger or unless MAYAN 
consents in writing, Ariel and its subsidiaries will conduct their businesses   
in the ordinary course of business consistent with past practices and shall use 
reasonable efforts:                                                             

. to keep available the services of their current officers, significant     
employees and consultants; and                                          

. to preserve their relationships with corporate partners, customers,       
suppliers and other persons with which they have business relations in  
order to preserve substantially intact their business organization.     

Ariel has also agreed that, until the completion of the merger or unless  
MAYAN consents in writing, Ariel and its subsidiaries will not engage in any of 
the following:                                                                  

. modification of Ariel's certificate of incorporation or bylaws;           

. issuance, sale, pledge, disposition of, grant, transfer, lease, license,  
guarantee or encumbrance of shares of Ariel capital stock or securities 
convertible into Ariel capital stock, except for limited issuances of   
securities in connection with the exercise of outstanding stock options;

. issuance, sale, pledge, disposition of, grant, transfer, lease, license,  
 guarantee or encumbrance of any material properties or assets of Ariel or
any Ariel subsidiaries, except for dispositions of inventory in the     
ordinary course of business or consistent with past practice;           

. acquisition of interests in other entities;                               

. incurrence of any indebtedness for borrowed money or issuance of any debt 
securities;                                                             

. material modification or termination of material contracts, except in the 
ordinary course of business;                                            

. making of or authorizing any new capital expenditures, or entering into   
any agreements providing for capital expenditures;                      

. declaration, setting aside or issuance of dividends or other              
distributions;                                                          

. redemption, purchase or other acquisition, directly or indirectly, of any 
shares of Ariel capital stock except repurchases of unvested shares at  
cost in connection with the termination of the employment relationship  
with any employee pursuant to stock option or purchase agreements;      

. modification of exercisability of any stock options or authorization of   
cash payments in exchange for stock options except as otherwise required
under any stock plan;                                                   

. amendment of the terms of any of Ariel's securities or any securities of  
any Ariel subsidiary;                                                   

. increase of compensation payable to directors, officers, consultants or   
employees;                                                              

. granting of any additional severance arrangements or entering into of any 
 additional agreements, which provide benefits upon a change in control of
Ariel that would be triggered by the merger, with any director, officer,
consultant or other employee;                                           

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. entering into any collective bargaining agreement;                        

. payment, discharge or satisfaction of any claims, liabilities or other    
indebtedness other than in the ordinary course consistent with past     
practice or under certain other circumstances;                          

. making of any material changes with respect to Ariel's accounting         
policies, principles, methods or procedures;                            

. making of material tax elections or settlements or compromises of any     
material tax liability; and                                             

. authorizing or entering into any formal or informal agreement or          
 otherwise making any commitment to do any of the foregoing or to take any
 action which would make any of the representations or warranties of Ariel
contained in the merger agreement untrue or incorrect or prevent Ariel  
from performing or causing Ariel not to perform its covenants thereunder
or result in any of the conditions to the merger not being satisfied.   

MAYAN has agreed that, until the completion of the merger or unless Ariel 
consents in writing, MAYAN will not engage in any of the following:             

. sale, pledge, disposition of, transfer or encumbrance of any material     
properties or assets of MAYAN except in the ordinary course of business;
and                                                                     

. authorizing or entering into any formal or informal agreement or          
 otherwise making any commitment to do any of the foregoing or to take any
 action which would make any of the representations or warranties of MAYAN
contained in the merger agreement untrue or incorrect or prevent MAYAN  
from performing or causing MAYAN not to perform its covenants thereunder
or result in any of the conditions to the merger not being satisfied.   

Each of Ariel and MAYAN has also agreed:                                    

. to notify the other promptly of certain events;                           

. to provide reasonable access to the other to its facilities and records;  
and                                                                     

. to make all necessary filings and obtain any consents and approvals as    
may be required in connection with the merger agreement and the merger. 

Additionally, Ariel has agreed to provide MAYAN copies of (i) its audited 
financial statements at and for the year ended December 31, 2000 and (ii) its   
filings with the Securities Exchange Commission, and MAYAN has agreed to        
provide Ariel copies of any reports it provides to its noteholders.             

The agreements related to the conduct of each of Ariel's and MAYAN's      
businesses in the merger agreement are complicated and not easily summarized.   
We urge stockholders to carefully read the article in the merger agreement      
entitled "Conduct of Business."                                                 

No Solicitation of Transactions                                                 

Until the merger is completed or the merger agreement is terminated, Ariel
has agreed not to take any of the following actions, directly or indirectly:    

. solicit, initiate, encourage or induce the making, submission or          
 announcement of any "Acquisition Proposal" or take any action that would,
individually or in the aggregate, reasonably be expected to lead to an  
"Acquisition Proposal," by a third party;                               

. furnish any information regarding Ariel or any Ariel subsidiaries to any  
person in connection with or in response to an "Acquisition Proposal" or
an inquiry or indication of interest that could lead to an "Acquisition 
Proposal," by a third party;                                            

. engage in discussions with any person with respect to any "Acquisition    
Proposal;"                                                              

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. approve, endorse or recommend any "Acquisition Proposal;" or              

. enter into any letter of intent or similar document or any contract       
contemplating or otherwise relating to any "Acquisition Proposal."      

An "Acquisition Proposal" is an offer or proposal for:                    

. a merger, consolidation, share exchange, business combination or similar  
transaction involving Ariel;                                            

. a sale, lease, exchange, transfer or other disposition of 15% or more of  
the assets of Ariel or any Ariel subsidiary, or the sale, lease,        
exchange, transfer or other disposition of any of Ariel's assets or any 
assets of any Ariel subsidiary, the absence of which would materially   
diminish the value of the merger to MAYAN or the benefits expected by   
MAYAN to be realized from the merger;                                   

. a tender offer or exchange offer for 15% or more of Ariel's outstanding   
 voting securities or the voting securities of any Ariel subsidiary or the
filing of a registration statement under the Securities Act;            

. the acquisition of 15% or more of Ariel's outstanding voting securities   
or the voting securities of any Ariel subsidiary;                       

. a solicitation in opposition to the approval of the merger agreement by   
the Ariel stockholders; or                                              

. a public announcement of a proposal, plan or intention to do any of the   
foregoing or any agreement to engage in any of the foregoing.           

 The Ariel board is not prohibited, however, from complying with Rules 14d-9
and 14e-2 under the Securities Exchange Act of 1934, with respect to a tender   
or exchange offer.                                                              

 In addition, Ariel may provide information in connection with and engage in
discussions with a third party regarding an acquisition proposal, if, among     
other things:                                                                   

. neither Ariel nor its representatives violated the merger agreement with  
respect to the acquisition proposal;                                    

. the acquisition proposal constitutes an "Ariel Superior Proposal;"        

. the board of directors of Ariel concludes in good faith, after            
consultation with Ariel's outside legal counsel, that failure to take   
that action would be inconsistent with the fiduciary obligations of the 
Ariel board to the Ariel stockholders under applicable law;             

. Ariel gives MAYAN at least 24 hours prior written notice of the identity  
of the person making the acquisition proposal and Ariel's intention to  
provide information or engage in discussions with that person, and Ariel
receives a signed confidentiality agreement from the person making the  
 acquisition proposal governing the use and disclosure of the information;
and                                                                     

. Ariel provides MAYAN the same information prior to providing the          
information to the person making the acquisition proposal.              

An "Ariel Superior Proposal" is an unsolicited, written proposal that the 
board of directors of Ariel has received relating to:                           

. a merger, consolidation, dissolution or similar transaction involving     
Ariel where the stockholders of Ariel immediately prior to the          
 transaction hold less than 50% of the equity interest in the surviving or
resulting entity of that transaction;                                   

. a sale or other disposition of all or substantially all of Ariel's        
assets; or                                                              

. the acquisition of 50% or more of Ariel's outstanding voting securities;  

in each case on terms that, the board of directors of Ariel determines in good  
faith, after considering the advice of an investment bank of nationally         
recognized reputation, are more favorable to Ariel and its stockholders than    

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the merger with MAYAN, so long as any financing required to consummate the      
transaction contemplated by the proposal is committed or is otherwise           
reasonably likely to be obtained by the person making the proposal on a timely  
basis.                                                                          

MAYAN is not subject to any non-solicitation covenants under the merger   
agreement but must use reasonable efforts to close the transaction.             

Conditions to Completing the Merger                                             

Ariel's and MAYAN's respective obligations to complete the merger and the 
related transactions are subject to approval of the merger by MAYAN's           
shareholders and the approval of the merger agreement by Ariel's stockholders,  
as well as the prior satisfaction or waiver (if permitted by applicable law) of 
each of the following conditions before completion of the merger:               

. the registration statement relating to the issuance of shares of Ariel    
common stock as contemplated by the merger agreement must be declared   
effective by the SEC and must not be the subject of any stop order or   
proceedings seeking a stop order;                                       

. no order, statute, writ, injunction or decree prohibits or prevents       
completion of the merger;                                               

. all consents, approvals and authorization legally required to consummate  
 the merger must have been obtained from all governmental entities, except
where no material adverse effect could reasonably be expected to occur; 

. no action or proceeding before any court or governmental agency is        
threatened, instituted or pending challenging, seeking to make illegal, 
 invalidate, render unenforceable, delay or otherwise restrain or prohibit
the consummation of the merger or the actions contemplated thereby, or  
otherwise relating to and materially adversely affecting the merger;    

. Ariel and MAYAN must have entered into, executed and delivered all        
documents necessary in order to comply with the terms of the convertible
promissory notes due 2005 and any exchange offer made in connection     
therewith; and                                                          

. the shares of Ariel common stock to be issued in connection with the      
merger must be authorized for listing on the Nasdaq National Market.    

MAYAN's obligations to complete the merger and the other transactions     
contemplated by the merger agreement are subject to the satisfaction or waiver  
of each of the following additional conditions before completion of the merger: 

. Ariel's representations and warranties must be accurate in all material   
respects when made and as of the completion of the merger, and MAYAN    
shall have received from Ariel an officer's certificate to that effect; 

. Ariel must have performed or complied in all material respects with all   
of its covenants in the merger agreement, and MAYAN shall have received 
from Ariel an officer's certificate to that effect;                     

. MAYAN shall have received a certificate from Ariel's secretary to the     
 effect that all corporate resolutions approving the merger, the amendment
to Ariel's certificate of incorporation providing for the authorization 
of additional shares of Ariel common stock and the reverse stock split  
and the adoption of the 2001 Stock Incentive Plan were duly adopted and 
attaching those resolutions and a copy of the amended certificate of    
incorporation certified by the Delaware Secretary of State;             

. MAYAN must have obtained the opinion of its tax counsel to the effect     
that the merger will constitute a reorganization within the meaning of  
Section 368(a) of the Internal Revenue Code; and                        

. the common stock of the combined company following the merger must        
qualify for listing on the Nasdaq National Market;                      

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. the reverse split of Ariel's common stock must be effective immediately   
prior to the merger;                                                    

. each share of MAYAN preferred stock outstanding immediately prior to the  
merger must have been converted into shares of MAYAN common stock;      

. the Amended and Restated Investors' Rights Agreement dated as of November 
1, 1999, the Amended and Restated Right of First Refusal and Co-Sale    
 Agreement dated as of October 21,1999 and the Amended and Restated Voting
Agreement dated as of October 21, 1999, all of which are between MAYAN  
and some of MAYAN's shareholders, must be terminated;                   

. all consents or approvals required in connection with the merger under    
any of Ariel's material contracts must have been obtained from all third
parties, except where no material adverse effect could reasonably be    
expected to occur as a result;                                          

. each of the current officers and directors of Ariel must have resigned    
from his or her officer or director position, as the case may be, at    
Ariel, except for Anthony Agnello and Esmond Goei, who shall remain on  
the board of directors of the combined company;                         

. the Ariel board of directors and the Ariel stockholders must have         
approved the adoption of the 2001 Stock Incentive Plan;                 

. each of the optionees of Ariel who are entitled to accelerated vesting as 
a result of the merger must have waived the acceleration of vesting with
respect to his or her options;                                          

. Ariel must have filed, if necessary, a registration statement with the    
 SEC, which shall have been declared effective, covering the resale of the
convertible subordinated promissory notes, the notes issuable upon      
exchange of the convertible subordinated promissory notes and the shares
of Ariel common stock issuable upon conversion of those notes;          

. Ariel must have maintained officers' and directors' liability insurance   
policies in amounts and with coverages equivalent to those in effect at 
the time of signing of the merger agreement;                            

. no event, change, condition or effect that is materially adverse to Ariel 
must have occurred;                                                     

. each of Carlos Borgialli, Gene Corrado, David During, Don Elwell, Richard 
Flocco, Nathan Guedalia, Ken Kristiansen, Jack Loprete, Bonne Mullen,   
Aziz Mzili, Arthur Naseef and Johnny Vieira, employees of Ariel, must   
have entered into an employment agreement with the combined company;    

. each of the officers and directors of Ariel must have executed market     
standoff agreements agreeing to refrain from selling, transferring or   
otherwise disposing of shares of Ariel common stock to be held by them  
following the merger for one year after the merger; and                 

. MAYAN must have obtained a legal opinion from Ariel's legal counsel.      

Ariel's obligations to complete the merger and the other transactions     
contemplated by the merger agreement are subject to the satisfaction or waiver  
of each of the following additional conditions before completion of the merger: 

. MAYAN's representations and warranties must be accurate in all material   
respects when made and as of the completion of the merger, and Ariel    
shall have received from MAYAN an officer's certificate to that effect; 

. MAYAN must have performed or complied in all material respects with all   
of its covenants in the merger agreement, and Ariel shall have received 
from MAYAN an officer's certificate to that effect;                     

. Ariel shall have received a certificate from MAYAN'S secretary to the     
effect that all corporate resolutions approving the merger were duly    
adopted and attaching those resolutions;                                

. Ariel must have obtained the opinion of its tax counsel to the effect     
that the merger will constitute a reorganization within the meaning of  
Section 368(a) of the Internal Revenue Code;                            

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. Ariel shall have received a certificate from MAYAN in accordance with     
treasury regulation Section 1.897-2(h) to the effect that MAYAN is not a
United States real property interest as that term is defined in Section 
897 of the Internal Revenue Code; and                                   

. each officer and director of MAYAN must have executed market standoff     
agreements agreeing to refrain from selling, transferring or otherwise  
disposing of shares of Ariel common stock held by them following the    
merger for one year after the merger.                                   

Extension, Waiver and Amendment of the Merger Agreement                         

Ariel and MAYAN may amend the merger agreement before completion of the   
merger; provided, however, that after approval by the Ariel stockholders and    
the MAYAN shareholders, no amendment may be made without stockholder approval   
if by law further stockholder approval is required.                             

 Either Ariel or MAYAN may, in writing, extend the other's time for or waive
compliance with the performance of any of the obligations or other acts under   
the merger agreement, waive any inaccuracies in the other's representations and 
warranties and waive compliance by the other with any of the agreements or      
conditions contained in the merger agreement.                                   

Termination of the Merger Agreement                                             

The merger agreement may be terminated under limited circumstances at any 
time before the completion of the merger, as summarized below:                  

.  by mutual consent of Ariel and MAYAN;                                    

.  by Ariel in response to an unsolicited, superior proposal by a third     
party, following the passage of five (5) business days from MAYAN's   
receipt of written notice of Ariel's intention to accept the superior 
proposal, the identity of the person making the superior proposal and 
the material terms of the superior proposal;                          

.  by MAYAN in response to a superior proposal by a third party, following  
the passage of five (5) business days from Ariel's receipt of written 
notice of MAYAN's intention to accept the superior proposal, the      
identity of the person making the superior proposal and the material  
terms of the superior proposal;                                       

.  by either of Ariel or MAYAN if the conditions to completion of the       
merger would not be satisfied because of a breach of a representation,
warranty, covenant or agreement of the other party, and the breaching 
party does not cure the breach within twenty days;                    

.  by Ariel, if the MAYAN shareholders do not approve the merger at the     
MAYAN special meeting;                                                

.  by MAYAN, if the Ariel stockholders do not approve the merger agreement  
and other proposals at the Ariel special meeting; or                  

.  by MAYAN, if Ariel common stock has become delisted from the Nasdaq      
 National Market, the outstanding stock of the combined company does not
qualify for listing on the Nasdaq National Market or the combined     
company's initial listing application has been denied.                

  In addition, the merger agreement may be terminated by either MAYAN or Ariel
under any of the following circumstances:                                       

. if the merger is not completed, without the fault of the terminating      
party, by August 31, 2001; or                                           

.if a final court order prohibiting the merger is issued and is not         
appealable.                                                           

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Payment of Fees and Expenses                                                    

  Whether or not the merger is consummated, all costs and expenses incurred in
connection with the merger agreement and the merger will be paid by the party   
incurring the expense, except that expenses incurred in connection with         
printing, filing and mailing the joint proxy statement/prospectus and the       
registration statement and any fees required to be paid under the Hart-Scott-   
Rodino Antitrust Improvements Act of 1976, as amended, if any, shall be shared  
equally.                                                                        

In addition, Ariel and MAYAN have agreed to reimburse one another for all 
expenses reasonably incurred by the non-terminating party if either of them     
terminates the merger agreement in response to a superior proposal by a third   
party, following the passage of five (5) business days from the non-terminating 
party's receipt of written notice of the terminating party's intention to       
accept the superior proposal, the identity of the person making the superior    
proposal and the material terms of the superior proposal.                       

Material Federal Income Tax Considerations                                      

The following discussion describes the material federal income tax        
considerations relevant to the exchange of shares of MAYAN common stock for     
Ariel common stock pursuant to the merger that are generally applicable to      
holders of MAYAN capital stock. This discussion is based on currently existing  
provisions of the Internal Revenue Code, existing and proposed Treasury         
regulations thereunder and current administrative rulings and court decisions,  
all of which are subject to change. Any change, which may or may not be         
retroactive, could alter the tax consequences to MAYAN shareholders as          
described herein.                                                               

MAYAN shareholders should be aware that this discussion does not deal with
all federal income tax considerations that may be relevant to particular MAYAN  
shareholders in light of their particular circumstances, such as shareholders   
who:                                                                            

.  are dealers in securities;                                               

.  are subject to the alternative minimum tax provisions of the Internal    
Revenue Code;                                                         

.  are foreign persons;                                                     

.  do not hold their MAYAN capital stock as capital assets;                 

.  acquired their shares in connection with stock option or stock purchase  
plans or in other compensatory transactions; or                       

.  acquired their shares as part of an integrated investment such as a      
hedge, straddle or other risk reduction transaction.                  

 In addition, the following discussion does not address the tax consequences
of the merger under foreign, state or local tax laws, the tax consequences of   
transactions effectuated prior or subsequent to, or concurrently with, the      
merger (whether or not any those transactions are undertaken in connection with 
the merger), including without limitation any transaction in which shares of    
MAYAN capital stock are acquired or shares of Ariel common stock are disposed   
of, or the tax consequences of the assumption by Ariel of MAYAN stock options   
or MAYAN warrants or the tax consequences of the receipt of rights to acquire   
Ariel common stock. Accordingly, MAYAN shareholders are urged to consult their  
own tax advisors as to the specific tax consequences to them of the merger,     
including the applicable federal, state, local and foreign tax consequences.    

 The merger is intended to constitute a reorganization within the meaning of
the Internal Revenue Code. If the merger does qualify as a reorganization,      
then, subject to the limitations and qualifications referred to herein, the     
merger will generally result in the following federal income tax consequences   
to MAYAN shareholders:                                                          

.  No gain or loss will be recognized by holders of MAYAN capital stock     
solely upon their receipt of Ariel common stock in exchange for MAYAN 
common stock in the merger (except to the extent of cash received in  
lieu of a fractional shares of MAYAN common stock).                   

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.  The aggregate tax basis of the Ariel common stock received by MAYAN      
shareholders in the merger (including any tax basis attributable to   
 fractional shares deemed disposed of) will be the same as the aggregate
tax basis of the MAYAN common stock surrendered in exchange therefor. 

.  The holding period of the Ariel common stock received by each MAYAN      
shareholder in the merger will include the period for which the MAYAN 
  common stock surrendered in exchange therefor was considered to be held,
  provided that the MAYAN common stock so surrendered is held as a capital
asset at the time of the merger.                                      

.  Cash payments received by holders of MAYAN common stock in lieu of a     
  fractional share of Ariel common stock had been issued in the merger and
then redeemed by Ariel. A MAYAN shareholder receiving that cash will  
  recognize gain or loss, upon the payment, measured by the difference, if
any, between the amount of cash received and the basis in such        
fractional share.                                                     

The parties are not requesting and will not request a ruling from the     
Internal Revenue Service as to the tax consequences of the merger. It is a      
condition to the completion of the merger that MAYAN obtain an opinion from     
Brobeck, Phleger & Harrison LLP and that Ariel obtain an opinion from its legal 
counsel to the effect that the merger will constitute a reorganization within   
the meaning of the Internal Revenue Code. MAYAN shareholders should be aware    
that these tax opinions do not bind the Internal Revenue Service and the        
Internal Revenue Service is therefore not precluded from successfully asserting 
a contrary opinion. These tax opinions will be subject to assumptions and       
qualifications, including but not limited to the truth and accuracy of          
representations made by MAYAN and Ariel. Ariel has indicated it intends to      
waive this condition and does not intend to seek an opinion on the subject.     

 A successful IRS challenge to the reorganization status of the merger would
result in MAYAN shareholders recognizing taxable gain or loss with respect to   
each share of MAYAN common stock surrendered equal to the difference between    
each stockholder's basis in that share and the fair market value, as of the     
effective time, of the Ariel common stock received in exchange therefor. In     
that event, a shareholder's aggregate basis in the Ariel common stock so        
received would equal its fair market value as of the closing date of the        
merger, and the shareholder's holding period for that stock would begin the day 
after the merger.                                                               

Accounting Treatment                                                            

We intend to account for the merger as a purchase for accounting and      
financial reporting purposes, which means that MAYAN will be treated as a       
separate entity for periods prior to the closing. Because MAYAN will own        
approximately 90% of the common stock of Ariel (on a diluted basis) after the   
merger, the merger will be accounted for as a reverse acquisition which results 
in MAYAN being the acquirer of Ariel for accounting purposes.                   

Stockholders' Dissenters' Rights of Appraisal                                   

 Under Delaware law and California law, neither Ariel stockholders nor MAYAN
shareholders, respectively, are entitled to dissenters' rights of appraisal in  
connection with the merger.                                                     

Director and Officer Indemnification and Insurance                              

 The merger agreement provides that, after the completion of the merger, all
rights of indemnification, advancement of expenses, exculpation, limitation of  
liability and similar rights existing in favor of present and former officers,  
directors, employees and agents of MAYAN shall survive the merger and shall     
continue for six years from the effective time. The merger agreement also       
provides that, for six years after the completion of the merger, Ariel will     
maintain directors' and officers' liability insurance at least at the level     
currently maintained by Ariel.                                                  

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Voting Agreements                                                               

In connection with the merger, the executive officers and directors [and  
certain employees] of Ariel and MAYAN have entered into voting agreements with  
MAYAN and Ariel, as the case may be. The terms of the voting agreements provide 
that those executive officers and directors will vote all shares of Ariel or    
MAYAN capital stock beneficially owned by them, subject to some exceptions, or  
any new shares of Ariel or MAYAN stock they may acquire, in favor of the        
approval of the merger and the merger agreement, and the transactions           
contemplated thereby. In connection with the voting agreements, each of the     
executive officers and directors has executed an irrevocable proxy to vote      
their shares in favor of the approval of the merger agreement and the merger,   
and the transactions contemplated thereby. As of March 28, 2001, the MAYAN      
shareholders who entered into voting agreements collectively beneficially held  
approximately 27,484,815 shares of MAYAN capital stock which represented        
approximately 58.97% of the outstanding MAYAN capital stock. As of March 28,    
2001, the Ariel stockholders who entered into the voting agreements             
collectively beneficially held approximately          shares, after giving      
effect to the one for    reverse stock split, of Ariel common stock which       
represented approximately 12.1% of the outstanding Ariel common stock,          
including shares issuable under stock options which are vested or will be       
vested within 60 days. None of the executive officers and directors who are     
parties to the voting agreements were paid additional consideration for         
entering into the voting agreements.                                            

Market Stand-Off Agreements                                                     

Each officer and director of MAYAN and Ariel has entered into an agreement
under which that person has agreed not to sell, transfer, pledge, hypothecate   
or otherwise dispose of any shares of Ariel common stock held or later acquired 
by that person for a period ending one year after the closing date, provided    
that Mr. Agnello is permitted to except            shares from this agreement,  
after giving effect to the one for    reverse stock split.                      

Bridge Loan                                                                     

  At the time of the signing of the merger agreement, MAYAN agreed that for so
long as the merger agreement has not been terminated, MAYAN will advance to     
Ariel, on an as-needed-basis, bridge loans of up to an aggregate of $2,000,000  
for the purpose of financing operating expenses incurred in the ordinary course 
of business. The loans will be advanced on the terms set forth in the form of   
bridge loan attached to the merger agreement. Each advance of all or any        
portion of the bridge loan is subject to the following conditions: (i) the      
representations and warranties of Ariel set forth in the merger agreement must  
be true and correct in all material respects as of the time of that advance,    
(ii) Ariel must not have breached in any material respect any covenant          
contained in the merger agreement, and (iii) Ariel must have given MAYAN at     
least three (3) days' written notice requesting that advance and affirming that 
the conditions described in (i) and (ii) above have been satisfied. As of May   
21, 2001, MAYAN has made four advances to Ariel in the aggregate amount of      
$2,000,000.                                                                     

The bridge loans may be secured by the assets of Ariel, including Ariel's 
intellectual property, and become due and payable on the earlier of the         
effective time of the merger or MAYAN's demand following termination of the     
merger agreement. Upon the occurrence of "events of default" as defined         
therein, including, but not limited to the existence of any material changes to 
the Ariel Financial Statements that were originally provided to MAYAN for the   
year ended December 31, 2000, the bridge loan will become immediately due and   
payable.                                                                        

However, MAYAN's right to demand and receive payment of the bridge loans, 
and its security interest in the assets of Ariel granted by Ariel to MAYAN      
under the bridge loans, are subordinate to those granted by Ariel to            
Transamerica Business Credit Corporation pursuant to that certain Loan and      
Security Agreement between Ariel and Transamerica Business Credit Corporation   
dated as of June 11, 1997 and as thereafter amended from time to time.          

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Ariel Rights Plan                                                               

On October 9, 1998, Ariel implemented a rights plan pursuant to which one 
preferred share purchase right was distributed to holders of Ariel's common     
stock as a dividend for each share of Ariel common stock they held on that      
date. Each right entitles the holder of that right to purchase 1/100 of a share 
of Series A Preferred Stock of Ariel at a purchase price equal to $25 per 1/100 
share of the preferred stock. The rights under the preferred stock are          
triggered upon the earlier of the time Ariel learns that a person or group has  
acquired beneficial ownership of 15% or more of the Ariel common stock or the   
close of business on the date designated by the board of directors following    
the commencement of, or public disclosure of an intent to commence, a tender    
offer, the consummation of which would result in the beneficial ownership by a  
person or group of 15% or more of Ariel's common stock. Absent an amendment to  
the rights plan, the merger would act as that trigger.                          

Under the rights plan, Ariel may amend the plan without any action on the 
part of the holders of the rights. On March 27, 2001, Ariel amended its rights  
plan to exempt the MAYAN transaction from triggering the rights under the plan. 

2001 Stock Incentive Plan                                                       

  The board of directors of Ariel agreed to adopt, prior to the effective time
of the merger, a 2001 Stock Incentive Plan, in the form attached as Appendix VI 
hereto. The 2001 plan will serve as the successor to the Ariel stock plans and  
the MAYAN stock plan. The board of directors of Ariel has agreed to take all    
actions that are necessary so that at the effective time, all the Ariel stock   
options outstanding under the Ariel stock plans will be transferred to the 2001 
plan and shall be treated as outstanding options under the 2001 plan. Each      
outstanding option so transferred will, however, continue to be governed solely 
by the terms of the documents evidencing those options and no provision of the  
2001 plan will be deemed to affect or otherwise modify the rights or            
obligations of the holders of those transferred options. See "Other Ariel       
Proposals" for a description of the 2001 Stock Incentive Plan.                  

Listing of Ariel Common Stock to be Issued in the Merger and Common Stock of    
Combined Company                                                                

  The filing of an application with the Nasdaq National Market for the listing
of the shares of Ariel common stock to be issued in the merger and the filing   
and acceptance of an application for initial listing of the outstanding common  
stock of the combined company is a condition to the consummation of the merger. 

Restrictions on Sale of Shares By Affiliates of Ariel and MAYAN                 

 The shares of Ariel common stock to be issued in connection with the merger
will be registered under the Securities Act and will be freely transferable     
under the Securities Act, except for shares of Ariel common stock subject to    
the Stand-Off Agreements and shares of Ariel common stock issued to any person  
who is deemed to be an affiliate of either Ariel or MAYAN at the time of the    
special meetings. Persons who may be deemed to be affiliates include            
individuals or entities that control, are controlled by, or are under common    
control with either Ariel or MAYAN and may include some of the officers,        
directors, or principal stockholders of Ariel or MAYAN. Affiliates may not sell 
their shares of Ariel common stock acquired in connection with the merger       
except pursuant to:                                                             

. an effective registration statement under the Securities Act covering the 
resale of those shares;                                                 

. an exemption under paragraph (d) of Rule 145 under the Securities Act; or 

. another applicable exemption under the Securities Act.                    

Ariel's registration statement on Form S-4, of which this document forms a
part, does not cover the resale of shares of Ariel common stock to be received  
by affiliates in the merger.                                                    

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Management Following the Merger                                                 

 Upon completion of the merger, it is anticipated that some of the directors
of MAYAN, including Thomas Edrington, Steven Krausz, Jim Mongiello and Peter    
Morris, will become the new directors of the combined company, along with       
Esmond Goei, a current member of the boards of both MAYAN and Ariel, and        
Anthony Agnello, a current member of the board of directors of Ariel. It is     
anticipated that the terms of service of these new board members will be        
staggered as follows: Messrs. Agnello and Goei will have terms expiring after   
the first year of service, which we expect will be in 2002, Messrs. Mongiello   
and Edringon will have terms expiring after their second year of service, which 
we expect will be in 2003, and Messrs. Morris and Krausz will have terms        
expiring after their third year of service, which we expect will be in 2004.    
Additionally, it is also anticipated that some of the current officers of       
MAYAN, including Esmond Goei and John Tingleff, will become the Chief Executive 
Officer and Chief Financial Officer, respectively, of the combined company.     
Dennis Schneider, Ariel's current Chief Executive Officer is also expected to   
become the Senior Vice President of Marketing of the combined company.          

Operations Following the Merger                                                 

Following the merger, MAYAN and Ariel will operate as a single company.   
Ariel and MAYAN have agreed that the shareholders of MAYAN will become          
stockholders of Ariel, and their rights as stockholders of Ariel will be        
governed by Ariel's certificate of incorporation, Ariel's bylaws and the laws   
of the State of Delaware.                                                       

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UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

  The merger agreement requires Ariel to issue, subject to adjustment pursuant
to subsequent issuances by MAYAN or repurchases by Ariel, approximately 3.33    
shares of Ariel common stock for each share of MAYAN common and preferred stock 
outstanding when the merger closes, subject to adjustment as provided in the    
merger agreement and subject to adjustment to give effect to a reverse split    
which will occur upon completion of the merger. The following tables set forth  
certain historical financial information of Ariel and MAYAN on an unaudited pro 
forma basis after giving effect to the merger as a "reverse acquisition" (i.e., 
with MAYAN as the acquiror of Ariel for accounting purposes).                   

The accompanying unaudited pro forma combined condensed balance sheet     
assumes the merger took place on March 31, 2001. The unaudited pro forma        
combined condensed balance sheet combines the unaudited balance sheet of MAYAN  
as of March 31, 2001 and the unaudited consolidated balance sheet of Ariel as   
of March 31, 2001.                                                              

Ariel's fiscal year ends on December 31. For purposes of the pro forma    
information, MAYAN's statement of operations for the year ended June 30, 2000   
has been combined with Ariel's unaudited consolidated statement of operations   
for the twelve months ended June 30, 2000 and MAYAN's unaudited statement of    
operations for the nine months ended March 31, 2001 has been combined with      
Ariel's unaudited consolidated statement of operations for the nine months      
ended March 31, 2001. The unaudited pro forma combined condensed statement of   
operations give effect to the Ariel Merger as if it had occurred on July 1,     
1999.                                                                           

The unaudited pro forma combined condensed financial information is       
presented for illustrative purposes only and is not necessarily indicative of   
the future financial position or future results of operations of MAYAN after    
the merger or of the financial position or results of operations of MAYAN that  
would have actually occurred had the merger been effected as of the dates       
described above.                                                                

The allocation of the purchase price reflected in the unaudited pro forma 
combined condensed financial information is preliminary. The actual purchase    
price allocation to reflect the fair values of assets acquired and liabilities  
assumed will be based upon management's evaluation of such assets and           
liabilities after the merger. Accordingly, the adjustments included here will   
change based upon the final allocation of the total purchase price, as adjusted 
to reflect stock values. That allocation may differ significantly from the      
preliminary allocation included in this statement.                              

On May 22, 2001, MAYAN made an offer to its current subordinated note     
holders to exchange the $75,000,000 of convertible subordinated notes for       
$50,000,000 of exchange notes with terms including the following:               

. The exchange notes will bear interest at 7 7/8% and will be payable in    
2005. The interest is payable semiannually in cash or common stock of   
MAYAN then currently traded on a U.S. national securities exchange. If  
MAYAN pays the interest with its common stock, the shares will be valued
at approximately 90% of the then fair market value.                     

. The exchange notes will be convertible into common stock of MAYAN by the  
holders of the notes at an initial price of $5.00 per share (conversion 
 price-subject to certain adjustments as defined). The exchange notes will
be converted into common stock at the option of MAYAN if: (i) MAYAN's   
common stock becomes publicly traded (such as through the contemplated  
merger with Ariel), (ii) MAYAN registers additional shares of its common
stock to be issued upon conversion of the exchange notes, and (iii)     
MAYAN's common stock price exceeds 200% of the conversion price for at  
least 20 days during a 30 day period. MAYAN may be required to pay      
 additional interest to the holders of the exchange notes upon a voluntary
conversion by the holders prior to November 1, 2003.                    

. MAYAN will have the option to redeem the exchange notes on or after       
November 1, 2003 at an amount ranging from 101.575% to 103.150% of the  
principal amount plus accrued and unpaid interest. In the               

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event of a (i) change in control of MAYAN or (ii) a delisting of MAYAN's  
common stock (after the merger with Ariel or an alternative public merger 
or complying public equity offering, as defined), the holders of the      
exchange notes may require MAYAN to repurchase the exchange notes at 105% 
of the principal amount plus accrued and unpaid interest.                 

. The holders of the exchange notes may require MAYAN to repurchase the     
exchange notes at 37.5% of the principal amount plus accrued and unpaid 
 interest prior to the earlier of (i) 90 days following the effective date
 of a shelf registration statement covering a resale of the exchange notes
and common stock into which the exchange notes are convertible following
the merger with Ariel (or an alternative public merger or complying     
public equity offering), (ii) the closing of an alternative merger (as  
defined) and (iii) January 10, 2002, if at the close of business on     
December 31, 2001 MAYAN has not closed the merger with Ariel (or an     
alternative public merger or complying public equity offering). This    
repurchase option could require MAYAN to make a cash payment of up to   
approximately $18,750,000 to repay the exchange notes and will result in
the exchange notes being classified as a current liability in MAYAN's   
balance sheet until this repurchase option expires.                     

. If MAYAN does not complete the contemplated merger with Ariel by December 
31, 2001, the holders of the exchange notes will have the option to     
change the terms of the exchange notes to terms that are consistent with
the currently outstanding $75,000,000 convertible subordinated notes.   

The note exchange, when and if completed, and assuming completion of the  
merger with Ariel by December 31, 2001, will result in MAYAN recording a one-   
time extraordinary gain in an amount determined upon completion of these        
events.                                                                         

The pro forma statements do not reflect any effect of the contemplated    
subordinated note exchange described in this offering circular, operating       
efficiencies, cost savings and other benefits, or merger related expenses       
anticipated by MAYAN's management as a result of the merger.                    

The unaudited pro forma combined condensed financial information should be
read in conjunction with the audited consolidated financial statements and      
related notes of Ariel and the audited financial statements of MAYAN, MAYAN's   
Management Discussion and Analysis of Financial Condition and Results of        
Operations and Ariel's Management Discussion and Analysis of Financial          
Condition and Results of Operations included in this joint proxy                
statement/prospectus.                                                           

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UNAUDITED PRO FORMA COMBINED CONDENSED
BALANCE SHEET 

March 31, 2001
(In thousands)

                                                                [Download Table]

                                Note   MAYAN               Pro Forma  Combined 
                                  2   Networks   Ariel    Adjustments Pro Forma
                                ----- --------  --------  ----------- ---------
                                                                               
            ASSETS                                                             
            ------                                                             
Current assets:                                                                
  Cash and cash equivalents....       $ 52,183  $    423   $    --    $ 52,606 
  Short-term investments.......         15,102       --         --      15,102 
  Accounts receivable, net.....            --        422        --         422 
  Inventories..................            --      2,280        --       2,280 
  Prepaid expenses and other                                                   
   current assets..............          1,064       692        --       1,756 
                                      --------  --------   --------   -------- 
    Total current assets.......         68,349     3,817        --      72,166 
                                      --------  --------   --------   -------- 
Property and equipment, net....          5,599     1,059        --       6,658 
Restricted cash................            824       --         --         824 
Subordinated debt issuance                                                     
 costs.........................          4,356       --         --       4,356 
Goodwill, intangible and other                                                 
 assets........................ A,G,H    2,237       674     23,934     26,845 
                                      --------  --------   --------   -------- 
    Total assets...............       $ 81,365  $  5,550   $ 23,934   $110,849 
                                      ========  ========   ========   ======== 

 LIABILITIES AND SHAREHOLDERS'                                                 
      EQUITY (DEFICIENCY)                                                      
 -----------------------------                                                 

Current liabilities:                                                           
  Accounts payable.............       $  3,835  $  1,662   $    --    $  5,497 
  Accrued payroll and employee                                                 
   benefits....................            406       658        --       1,064 
  Royalties payable............            --         91        --          91 
  Other accrued liabilities....   F      2,640     1,143      2,500      6,283 
  Current portion of long-term                                                 
   debt obligations............  E,H       436       886        767      2,089 
  Current portion of capital-                                                  
   lease.......................              5       110        --         115 
                                      --------  --------   --------   -------- 
    Total current liabilities..          7,322     4,550      3,267     15,139 
                                      --------  --------   --------   -------- 
Subordinated convertible                                                       
 notes.........................         78,295       --                 78,295 
Capital-lease obligation, net                                                  
 of current portion............            --         76                    76 
Long-term debt.................   E        203     1,067     (1,067)       203 
Deferred rent..................            323       --                    323 
Shareholders' equity                                                           
 (deficiency):                                                                 
  Preferred stock..............   D     88,726       --     (88,726)       --  
  Common stock................. A,B,D   15,612        13    111,286    126,911 
  Additional paid-in capital...   B        --     46,437    (46,437)       --  
  Notes receivable from                                                        
   shareholders................         (1,053)      --         --      (1,053)
  Deferred stock compensation..   A     (8,699)      --        (482)    (9,181)
  Accumulated other                                                            
   comprehensive loss..........   B         47      (958)       958         47 
  Accumulated deficit..........  B,C   (99,411)  (45,635)    45,135    (99,911)
                                      --------  --------   --------   -------- 
    Total shareholders' equity                                                 
     (deficiency)..............         (4,778)     (143)    21,734     16,813 
                                      --------  --------   --------   -------- 
    Total liabilities and                                                      
     shareholders' equity                                                      
     (deficiency)..............       $ 81,365  $  5,550   $ 23,934   $110,849 
                                      ========  ========   ========   ======== 
Other data--shares outstanding                                                 
 (see Note 5) .................         46,606    13,074    108,592    168,272 
                                      ========  ========   ========   ======== 

See footnotes to unaudited pro forma combined condensed financial statements. 

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UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS 

Year Ended June 30, 2000
(In thousands, except per share amounts)

                                                                [Download Table]

                                        MAYAN               Pro Forma  Combined 
                                Note 2 Networks   Ariel    Adjustments Pro Forma
                                ------ --------  --------  ----------- ---------
                                                                                
Revenues......................         $    --   $  8,971    $   --    $  8,971 
Cost of revenues..............              --      4,464        --       4,464 
                                       --------  --------    -------   -------- 
Gross profit..................              --      4,507        --       4,507 
                                       --------  --------    -------   -------- 
Operating expenses:                                                             
  Research and development....           34,516     5,553        --      40,069 
  Sales and marketing.........            2,921     5,347        --       8,268 
  General and administrative..            4,653     6,660        --      11,313 
  Restructuring and special                                                     
   charges....................              --      2,726        --       2,726 
  Amortization of                                                               
   intangibles................    C         --        --       8,577      8,577 
  Amortization of deferred                                                      
   stock compensation.........    C       1,112       --         121      1,233 
                                       --------  --------    -------   -------- 
    Total operating expenses..           43,202    20,286      8,698     72,186 
                                       --------  --------    -------   -------- 
Loss from operations..........          (43,202)  (15,779)    (8,698)   (67,679)
                                       --------  --------    -------   -------- 
Interest income...............            2,508       387        --       2,895 
Other nonoperating income.....              --         51        --          51 
Interest expense including                                                      
 accretion of redemption                                                        
 premium......................             (163)     (483)       --        (646)
                                       --------  --------    -------   -------- 
Net loss......................         $(40,857) $(15,824)   $(8,698)  $(65,379)
                                       ========  ========    =======   ======== 
Basic and diluted net loss per                                                  
 share........................         $ (10.00) $  (1.42)                      
                                       ========  ========                       
Shares used in calculating                                                      
 basic and diluted net loss                                                     
 per share (see Note 5).......            4,085    11,157                       
                                       ========  ========                       
Pro forma basic and diluted                                                     
 net loss per share...........         $  (1.16)                       $  (0.51)
                                       ========                        ======== 
Shares used in calculating                                                      
 basic and diluted net loss                                                     
 per share (see Note 5).......           35,356                         128,892 
                                       ========                        ======== 

See footnotes to unaudited pro forma combined condensed financial statements. 

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UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS 

Nine Months Ended March 31, 2001
(In thousands, except per share amounts)

                                                                [Download Table]

                                        MAYAN               Pro Forma  Combined 
                                Note 2 Networks   Ariel    Adjustments Pro Forma
                                ------ --------  --------  ----------- ---------
                                                                                
Revenues......................         $    --   $  5,719    $   --    $  5,719 
Cost of revenues..............              --      3,233        --       3,233 
                                       --------  --------    -------   -------- 
Gross profit..................              --      2,486        --       2,486 
                                       --------  --------    -------   -------- 
Operating expenses:                                                             
  Research and development....           23,959     3,742        --      27,701 
  Sales and marketing.........            7,367     3,880        --      11,247 
  General and administrative..            7,650     5,218        --      12,868 
  Amortization of                                                               
   intangibles................     C        --        --       6,434      6,434 
  Amortization of deferred                                                      
   stock compensation.........     C      3,675       --          90      3,765 
                                       --------  --------    -------   -------- 
    Total operating expenses..           42,651    12,840      6,524     62,015 
                                       --------  --------    -------   -------- 
Loss from operations..........          (42,651)  (10,354)    (6,524)   (59,529)
                                       --------  --------    -------   -------- 
Interest income...............            2,795       140        --       2,935 
Other nonoperating income.....              --         84        --          84 
Interest expense including                                                      
 accretion of redemption                                                        
 premium......................           (5,889)     (193)       --      (6,082)
                                       --------  --------    -------   -------- 
Loss before provision for                                                       
 income taxes.................          (45,745)  (10,323)    (6,524)   (62,592)
Benefit for income taxes......              --        424        --         424 
                                       --------  --------    -------   -------- 
Net loss......................         $(45,745) $ (9,899)   $(6,524)  $(62,168)
                                       ========  ========    =======   ======== 
Basic and diluted net loss per                                                  
 share........................         $  (6.84) $  (0.76)                      
                                       ========  ========                       
Shares used in calculating                                                      
 basic and diluted net loss                                                     
 per share (see Note 5).......            6,685    13,074                       
                                       ========  ========                       
Pro forma basic and diluted                                                     
 net loss per share...........         $  (1.07)                       $  (0.40)
                                       ========                        ======== 
Shares used in calculating                                                      
 basic and diluted net loss                                                     
 per share (see Note 5).......           42,685                         155,215 
                                       ========                        ======== 

See footnotes to unaudited pro forma combined condensed financial statements. 

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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED 
FINANCIAL INFORMATION 

1. The Merger                                                                   

 The merger will be treated as a reverse acquisition purchase in which MAYAN
is treated as the acquirer of Ariel for financial accounting purposes. Under    
that method, the purchase price for accounting purposes is established using    
the fair market value of the outstanding Ariel common stock, determined using   
average stock closing prices beginning two days before and ending two days      
after the announcement of the merger in March 2001, plus the value of Ariel's   
stock options and warrants and estimated acquisition-related costs, as follows  
(in thousands):                                                                 

                                                                [Download Table]
                                                                           
Fair value of Ariel's common stock................................. $17,127
Fair value of Ariel's options and warrants issued..................   5,446
Acquisition-related costs (including $1,500 included in other              
 assets and other                                                          
 accrued liabilities as of March 31, 2001).........................   4,000
                                                                    -------
                                                                    $26,573
                                                                    =======

The unaudited pro forma combined condensed balance sheet and statements of
operations are not necessarily indicative of the financial position and         
operating results that would have been achieved had the merger been completed   
as of the beginning of the earliest periods presented. They should not be       
construed as being a representation of financial position or future operating   
results of the combined companies. Management does not expect significant       
changes to the preliminary valuation of the transaction. However, the final     
purchase price allocation could be significantly different from the amounts     
reflected in the unaudited pro forma combined condensed information. In         
addition, the unaudited pro forma combined condensed financial information      
gives effect only to the adjustments set forth in the accompanying notes and    
does not reflect any restructuring or merger related costs, or any potential    
cost savings or other synergies that management expects to realize as a result  
of the merger or any effect of the subordinated note exchange transaction       
contemplated by this joint proxy statement/prospectus.                          

2. Adjustments to Unaudited Pro Forma Combined Condensed Financial Statements   

 The adjustments to the unaudited pro forma combined condensed balance sheet
as of March 31, 2001 and the pro forma combined condensed statements of         
operations for the year ended June 30, 2000 and for the nine months ended March 
31, 2001 in connection with the proposed merger are presented below:            

(A) The fair values of Ariel's net assets have been estimated for the       
 purpose of allocating the purchase price of the deemed acquisition of
Ariel and determining the pro forma effect of the acquisition on the
combined financial statements. The estimated purchase price of      
$26,573,000 has been assigned to the tangible and intangible assets 
acquired and liabilities assumed as follows (in thousands):         

                                                                [Download Table]
                                                                         
Net current and other assets at March 31, 2001.................. $ 5,550 
Fair value adjustments:                                                  
  Customer relationships--3-year life...........................     400 
  Trademarks and trade names--3-year life.......................     800 
  Acquired in-process research and development--expensed at              
   closing......................................................     500 
  Assembled work force--3-year life.............................     710 
  Developed technology--3-year life.............................   6,300 
  Goodwill--3-year life.........................................  17,524 
  Deferred compensation--4-year life............................     482 
                                                                 ------- 
                                                                  32,266 
Less liabilities assumed at March 31, 2001......................  (5,693)
                                                                 ------- 
                                                                 $26,573 
                                                                 ======= 

(see Note 1 for the fair value of Ariel common stock, options and     
warrants issued.)                                                           

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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED 
FINANCIAL INFORMATION--(Continued)  

(B) This adjustment is to eliminate the common stock, additional paid in    
 capital, accumulated other comprehensive loss and accumulated deficit
of Ariel.                                                           

(C) The pro forma adjustments represent the estimate for goodwill,          
   workforce- in-process and deferred compensation amortization that would
have been recorded during the period covered by the pro forma       
statements of operations, related to the acquisition. The in-process
   research and development expense has been reflected as an adjustment to
the accumulated deficit in the pro forma balance sheet.             

  Amo rtization for deferred stock compensation, customer relationships,
 trademarks and trade names, assembled workforce, developed technology
and goodwill for the year ended June 30, 2000 is $121,000, $133,000,
$267,000, $237,000, $2,100,000 and $5,840,000, respectively; and    
$90,000, $100,000, $200,000, $178,000, $1,575,000 and $4,381,000,   
respectively for the nine months ended March 31, 2001. The pro forma
adjustments are based on the assumption that the goodwill and other 
intangibles relating to the merger are amortized on a straight-line 
basis over three years and deferred stock compensation is amortized 
over four years.                                                    

  The impact on the pro forma net loss of these amortizations was a charge
of $8,698,000 and $6,524,000 for the year ended June 30, 2000 and the 
  nine months ended March 31, 2001. The actual amortization of intangibles
arising from the transaction will take place in periods subsequent to 
the acquisition.                                                      

(D) This adjustment is to convert all of MAYAN'S convertible preferred      
stock to common stock.                                              

(E) This adjustment is to reclassify Ariel's long-term debt to current due  
to provisions in the borrowing agreement requiring repayment of this
debt in the event of a change in control of Ariel.                  

(F) This adjustment is to accrue for additional MAYAN acquisition related   
costs.                                                              

(G) This adjustment is to remove $1,500,000 of acquisition related costs    
from MAYAN's balance sheets. (See Note 1.)                          

(H) This adjustment is to eliminate the $300,000 promissory note between    
MAYAN and Ariel.                                                    

3. In-Process Research and Development                                          

In connection with the merger, it is estimated that approximately $500,000
of the purchase price will be allocated to in-process research and development  
or IPR&D. MAYAN has engaged an independent third-party appraisal company to     
assist in the valuation of the intangible assets acquired. This valuation is    
expected to be completed after the merger closes.                               

The preliminary fair value assigned to purchased IPR&D was estimated by   
discounting, to present value, the cash flows expected to result from each      
Ariel research and development project once it has reached technological        
feasibility. A discount rate consistent with the risks of each such project     
was used to estimate the present value of cash flows. In estimating future      
cash flows, consideration was given to other tangible and intangible assets     
required for the successful development of the technology resulting from each   
purchased IPR&D project and adjusted future cash flows for a charge reflecting  
the contribution of these assets to each project. The estimated future cash     
flows resulting from IPR&D were further adjusted for the contribution of core   
technology to the value of each purchased IPR&D project. Based upon these cash  
flows the value assigned to purchased research and development was the amount   
attributable to the efforts of Ariel up to the time of acquisition. This        
amount was estimated through application of the "stage of completion"           
calculation by multiplying the estimated present value of future cash flows     
excluding costs of completion by the percentage of completion of each           
purchased research and development project at the time of acquisition.          

The nature of the efforts to develop the purchased IPR&D into commercially
viable products principally relates to the completion or acceleration of        
existing development programs. Costs related to the full-scale manufacturing,   
distribution and marketing of the products are included in the cash flow        
projection upon which                                                           

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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED 
FINANCIAL INFORMATION--(Continued)

the IPR&D value is based. The resulting net cash flows from such projects were  
based on Ariel's estimates of revenues, cost of sales, research and development 
costs, sales and marketing, general and administrative, and the anticipated     
income tax effect and these estimates were those considered by the MAYAN        
Networks board of directors in its evaluation of this transaction.              

 The discounting of net cash flows back to their present value is based on a
discount derived from the weighted average cost of capital for Ariel. The       
weighted average cost of capital calculation produces the average required rate 
of return of an investment in an operating enterprise, based on various         
required rates of return from investments in various areas of that enterprise.  
The discount rate used in discounting the net cash flows from purchased in-     
process research and development projects was 30%.                              

The forecast data employed in the analyses were based upon product level  
forecast information obtained by Ariel from numerous internal and external      
sources. Ariel management has reviewed and challenged the forecast data and     
related assumptions and used the information in analyzing IPR&D. The forecast   
data and assumptions are inherently uncertain and unpredictable. However, based 
upon the information available at this time, Ariel believes the forecast data   
and assumptions to be reasonable. These assumptions may be incomplete or        
inaccurate, and no assurance can be given that unanticipated events and         
circumstances will not occur. Accordingly, actual results may vary from the     
forecasted results. Any such variance may result in a material adverse effect   
on the future financial condition and results of operations of Ariel after the  
merger.                                                                         

  In the allocation of purchase price to the IPR&D, the concept of alternative
future use was specifically considered for each of the programs under           
development. The acquired IPR&D consists of Ariel's work to complete each of    
the identified programs. The programs are each very specific to the products    
and markets for which they are intended. There are no alternative uses for the  
in-process programs if the development programs fail or are otherwise deemed    
unfeasible. The development effort for the acquired IPR&D does not possess an   
alternative future use for Ariel after the merger as defined by accounting      
principles generally accepted in the United States of America.                  

4. Items Not Adjusted                                                           

The pro forma statements do not reflect any effect of the proposed note   
exchange transaction as described in this joint proxy statement/prospectus,     
operating efficiencies, cost savings and other benefits, or merger related      
expenses anticipated by MAYAN's management as a result of the merger.           

If MAYAN does not complete the contemplated merger with Ariel by December 
31, 2001, the holders of the exchange notes will have the option to change the  
terms of the exchange notes to terms that are consistent with the currently     
outstanding $ 75,000,000 convertible subordinated notes.                        

The note exchange, when and if completed, and assuming completion of the  
Ariel merger by December 31, 2001, will result in MAYAN recording a one-time    
extraordinary gain in an amount determined upon completion of these events.     

The holders of the exchange notes may require MAYAN to repurchase the     
exchange note at 37.5% of the principal amount plus accrued unpaid interest     
prior to the earlier of (i) 90 days following the effective date of a shelf     
registration statement covering the resale of the exchange notes and common     
stock into which the exchange notes are convertible following the Ariel merger  
(or an alternative public merger or complying public offering), (ii) the        
closing of an alternative merger (as defined) and (iii) January 10, 2002 if at  
the close of business on December 31, 2001 MAYAN has not closed the Ariel       
merger (or an alternative public merger or complying public offering). This     
repurchase option could require MAYAN to make a cash payment of up to           
approximately $18,750,000 to repay the exchange notes and will result in the    
exchange notes being classified as a current liability in MAYAN's balance sheet 
until this repurchase option expires.                                           

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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED 
FINANCIAL INFORMATION--(Continued)  

5. Pro Forma Net Loss Per Share                                                 

The pro forma basic and diluted net loss per share is computed by dividing
the pro forma net loss by the pro forma basic and diluted weighted average      
number of shares outstanding, assuming Ariel and MAYAN had merged at the        
beginning of the earliest period presented. The pro forma basic and diluted     
weighted average number of shares outstanding includes the assumed conversion   
of MAYAN's preferred stock to common stock upon the completion of the merger.   
The pro forma weighted basic and diluted average number of shares outstanding,  
and required pro forma adjustment to the weighted shares outstanding, are       
calculated as follows for the year ended June 30, 2000 and the nine months      
ended March 31, 2001 (in thousands):                                            

                                                                [Download Table]

                                                                    Basic and
                                                                     Diluted 
                                                                    ---------
                                                                             
For the year ended June 30, 2000:                                            
  MAYAN Networks weighted average common shares....................    4,085 
  MAYAN Networks weighted average preferred shares.................   31,271 
                                                                     ------- 
    MAYAN Networks weighted average shares.........................   35,356 
Multiplied by exchange ratio of ...................................     3.33 
                                                                     ------- 
Equivalent Ariel shares............................................  117,735 
Add Ariel weighted average shares..................................   11,157 
                                                                     ------- 
    Pro forma combined weighted average shares outstanding.........  128,892 
                                                                     ======= 


                                                                    Basic and
                                                                     Diluted 
                                                                    ---------
                                                                             
For the nine months ended March 31, 2001:                                    
  MAYAN Networks weighted average common shares....................    6,685 
  MAYAN Networks weighted average preferred shares.................   36,000 
                                                                     ------- 
    MAYAN Networks weighted average shares.........................   42,685 
Multiplied by exchange ratio of ...................................     3.33 
                                                                     ------- 
Equivalent Ariel shares............................................  142,141 
Add Ariel weighted average shares..................................   13,074 
                                                                     ------- 
    Pro forma combined weighted average shares outstanding.........  155,215 
                                                                     ======= 

The adjustment to common shares outstanding at March 31, 2001, is         
calculated as follows (in thousands):                                           

                                                                [Download Table]
                                                                             
As of March 31, 2001:                                                        
  MAYAN Networks common shares outstanding..........................  10,606 
  MAYAN Networks preferred shares outstanding.......................  36,000 
                                                                     ------- 
    MAYAN Networks shares outstanding...............................  46,606 
Multiplied by exchange ratio of.....................................    3.33 
                                                                     ------- 
Equivalent Ariel shares............................................. 155,198 
Add Ariel shares outstanding........................................  13,074 
                                                                     ------- 
Pro forma combined shares outstanding............................... 168,272 
Less combined shares outstanding before exchange ratio effect....... (59,680)
                                                                     ------- 
    Required pro forma adjustment to shares outstanding............. 108,592 
                                                                     ======= 

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DESCRIPTION OF CAPITAL STOCK AND
COMPARISON OF STOCKHOLDER RIGHTS

When Ariel and MAYAN complete the merger, MAYAN shareholders will become  
Ariel stockholders and Ariel will change its name to "MAYAN Networks            
Corporation."                                                                   

  The following is a description of the Ariel common stock to be issued in the
merger and a summary of the significant differences between the rights of       
holders of Ariel common stock and MAYAN common stock.                           

Description of Ariel Capital Stock                                              

Ariel's authorized capital stock consists of 40,000,000 shares of common  
stock, par value $.001 per share, and 2,000,000 shares of preferred stock, par  
value $.001 per share.                                                          

  This summary is subject to, and qualified in its entirety by, the provisions
of Ariel's restated certificate of incorporation where those rights are set     
forth in full, and the provisions of applicable law.                            

Common Stock. As of March 28, 2001, there were approximately              
shares of common stock outstanding held of record by approximately 206          
stockholders after giving effect to the one for    reverse stock split. The     
holders of common stock are entitled to one vote for each share held of record  
on all matters submitted to a vote of the holders of common stock. Subject to   
preferences applicable to any then outstanding preferred stock, holders of      
common stock are entitled to share ratably in all assets remaining after        
payment of its liabilities and the liquidation preference of any preferred      
stock. Holders of common stock have no preemptive or subscription rights, and   
there are no redemption or conversion rights with respect to those shares. All  
outstanding shares of common stock are fully paid and non-assessable.           

Preferred Stock. Ariel's board of directors has the authority to issue    
preferred stock in one or more series and to fix the number of shares           
constituting that series and the preferences, limitations and relative rights,  
including dividend rights, dividend rate, voting rights, terms of redemption,   
redemption price or prices, conversion rights and liquidation preferences of    
the shares constituting any series, without any further vote or action by its   
stockholders. The issuance of preferred stock by Ariel's board of directors     
could adversely affect the rights of holders of common stock.                   

  The potential issuance of preferred stock may have the effect of delaying or
preventing a change in control of Ariel, may discourage bids for Ariel's common 
stock at a premium over the market price of the common stock and may adversely  
affect the market price of, and the voting and other rights of the holders of,  
common stock. Immediately after the completion of the merger, there will be no  
shares of preferred stock outstanding.                                          

Warrants. As of March 28, 2001, Ariel had outstanding warrants to purchase
an aggregate of approximately          shares of its common stock after giving  
effect to the one for    reverse stock split to become effective immediately    
prior to the merger. Warrants for [    ] shares expire on May 18, 2005 and have 
an exercise price equal to $[   ] after giving effect to the one for    reverse 
stock split. Warrants for [    ] shares expire on February 24, 2005 and have an 
exercise price equal to $[   ] after giving effect to the one for    reverse    
stock split. Warrants for [    ] shares expire on October 18, 2006 and have an  
exercise price equal to $[   ] after giving effect to the one for    reverse    
stock split. The exercise price of all warrants is subject to customary         
adjustments on stock splits, stock dividends, any merger or acquisition         
involving Ariel and similar transactions, such as to permit the holders of      
warrants to receive upon exercise of the warrants that which they would have    
received had they exercised the warrants immediately prior to that transaction. 

Options. As of March 28, 2001 Ariel had outstanding options for           
approximately          shares of common stock at a weighted average exercise    
price of $[ ] after giving effect to the one for    reverse stock split.        

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  Effect of Delaware Anti-takeover Statute. Ariel is subject to Section 203 of
the Delaware General Corporation law, as amended, which prohibits a 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:                                       

(i) prior to that 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;                      

(ii) upon consummation of the transaction that resulted in the        
stockholder 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 for purposes of determining   
the number of shares outstanding those shares owned (1) by persons who are  
directors and also officers and (2) by 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                                                          

(iii) on or subsequent to that 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 66 2/3% of the outstanding voting stock that is not owned  
by the interested stockholder.                                              

Section 203 defines business combinations to include:                     

(i) any merger or consolidation involving the corporation and any     
interested stockholder;                                                     

(ii) any sale, transfer, pledge or other disposition of 10% or more of
the assets of the corporation involving the interested stockholder;         

(iii) any transaction that results in the issuance or transfer by the 
corporation of any stock of the corporation to the interested stockholder;  

(iv) any transaction involving the corporation that has the effect of 
increasing the proportionate share of the stock of any class or series of   
the corporation beneficially owned by the interested stockholder; or        

(v) 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 that entity or person.                                            

Certificate of Incorporation and Bylaw Provisions. Ariel's restated       
certificate of incorporation and restated bylaws include provisions that may    
have the effect of discouraging, delaying or preventing a change in control of  
Ariel or an unsolicited acquisition proposal that a stockholder might consider  
favorable, including a proposal that might result in the payment of a premium   
over the market price for the shares held by stockholders. See "Comparison of   
Rights of Ariel Stockholders and MAYAN Stockholders".                           

  Transfer Agent. The transfer agent and registrar for Ariel's common stock is
Continental Stock Transfer & Trust Company. Its address is 2 Broadway, New      
York, New York, 10004, and its telephone number is (212) 509-4000.              

Description of MAYAN Capital Stock                                              

MAYAN's authorized capital stock consists of 65,000,000 shares of common  
stock and 36,000,361 shares of preferred stock.                                 

The following description of MAYAN's securities does not purport to be    
complete and is subject to, and qualified in its entirety by, the provisions of 
MAYAN's agreements and instruments covering MAYAN's preferred stock issuances.  

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 As of March 31, 2001, MAYAN had issued and outstanding 10,606,410 shares of
common stock, 1,907,500 shares of Series A preferred stock, 7,843,137 shares of 
Series B preferred stock, 11,826,346 shares of Series C preferred stock, and    
14,423,077 shares of Series D preferred stock.                                  

  There are outstanding warrants to purchase 88,236 shares of common stock. In
addition, as of March 31, 2001, MAYAN had reserved an aggregate of              
approximately 3,075,446 shares of common stock for issuance upon exercise of    
outstanding stock options. MAYAN also has reserved 1,907,500, 7,843,137,        
11,826,346 and 14,423,077 shares of common stock to be issued upon the          
conversion of MAYAN's outstanding shares of Series A preferred stock, Series B  
preferred stock, Series C preferred stock and Series D preferred stock,         
respectively. In addition, MAYAN has reserved 88,236 shares of common stock to  
be issued upon the exercise of warrants to purchase common stock. An additional 
10,000,000 shares of MAYAN common stock have been reserved for issuance upon    
the conversion of the maximum number of shares of MAYAN's convertible           
subordinated promissory notes.                                                  

Common Stock. Subject to the voting rights of the holders of the preferred
stock, the holders of common stock will vote as a class with the holders of the 
preferred stock and are entitled to one vote for each share held of record upon 
the matters and in the manner as may be provided by law. Subject to the rights  
of the holders of the preferred stock to receive preferential dividends, the    
holders of shares of common stock are entitled to receive ratably dividends     
when, as and if declared by the board of directors out of funds legally         
available for distribution. In the event of MAYAN's liquidation, dissolution or 
winding up, the holders of shares of common stock are entitled to share ratably 
with one another in all available funds and assets remaining after payment of   
MAYAN's liabilities and the liquidation preferences to the holders of the       
preferred stock. Other than as described herein, the holders of common stock    
have no preemptive, subscription, redemption, sinking fund or conversion        
rights.                                                                         

Pursuant to the terms of their stock option and stock purchase agreements,
each of the shares of common stock issued upon exercise of unvested options are 
subject to a right of repurchase by MAYAN. The repurchase right lapses as the   
stock vests. In addition, all shares of common stock held by Messrs. Gatti,     
Goei and Raza, K.D. Partners and F&F, Inc. are subject to a right of refusal in 
favor of MAYAN and the holders of preferred stock and co-sale rights in favor   
of the holders of preferred stock. The right of first refusal and co-sale       
rights lapse on the earlier to occur of:                                        

. a liquidation, dissolution or indefinite cessation of MAYAN's business    
operations;                                                             

. the execution of a general assignment for the benefit of creditors or the 
appointment of a receiver or trustee to take possession of MAYAN's      
property and assets;                                                    

. a firm commitment underwritten public offering at a pre-money valuation   
equal to or greater than $100,000,000 and which results in aggregate net
cash proceeds to MAYAN of at least $10,000,000; or                      

. a merger or sale of all or substantially all of MAYAN'S assets or if      
MAYAN effects any other transaction or series of related transactions in
which more than 50% of the voting power of the company is disposed of.  

Preferred Stock                                                               

MAYAN currently has outstanding 1,907,500 shares of Series A preferred    
stock, 7,843,137 shares of Series B preferred stock, 11,826,647 shares of       
Series C preferred stock, and 14,423,077 shares of the Series D preferred       
stock.                                                                          

All of MAYAN's preferred stock is required to be converted into common    
stock, on a one to one basis, as a condition to the closing of the merger. In   
addition, the holders of preferred stock are required to terminate their rights 
as preferred stockholders and to become common holders.                         

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Comparison of Rights of Ariel Stockholders and MAYAN Shareholders               

The rights of holders of Ariel common stock are governed by Delaware law, 
Ariel's restated certificate of incorporation, as amended, and Ariel's restated 
bylaws, while the rights of MAYAN's shareholders are governed by California     
law, MAYAN's amended and restated articles of incorporation and MAYAN bylaws,   
as amended. In most respects, the rights of MAYAN's shareholders are similar to 
those of Ariel stockholders. The following discussion summarizes the            
significant differences between the companies' charter documents. This summary  
is not a complete discussion of, and is qualified by reference to, Ariel's      
restated certificate of incorporation, as amended, Ariel's restated bylaws,     
Delaware law, MAYAN's amended and restated articles of incorporation, MAYAN's   
bylaws, as amended, and California law.                                         

Capital Stock. MAYAN's amended and restated articles of incorporation     
provide that MAYAN's authorized capital stock consists of 65,000,000 shares of  
common stock, $.0001 par value, and 36,000,361 shares of preferred stock,       
$.0001 par value, consisting of 1,907,500 shares of Series A preferred stock,   
7,843,137 shares of Series B preferred stock, 11,826,647 shares of Series C     
preferred stock, and 14,423,077 shares of the Series D preferred stock. As of   
March 28, 2001, there were approximately 10,671,044 shares of MAYAN common      
stock outstanding held by approximately 209 shareholders of record and          
36,000,060 shares of MAYAN preferred stock outstanding held by approximately    
111 stockholders of record. Ariel's authorized capital stock consists of        
shares of common stock, after giving effect to the one for  
reverse stock split which is expected to occur immediately prior to the         
effective time of the merger, par value $.001 per share, and 2,000,000 shares   
of preferred stock, par value $.001 per share. As of March 28, 2001, there were 
approximately         shares of Ariel common stock outstanding, after giving    
effect to the one for     reverse stock split, held by approximately 206        
shareholders of record.                                                         

Classified Board. Ariel's restated certificate of incorporation provides  
that the Ariel board of directors be divided into three classes with staggered  
three-year terms. As a result, only one of the three classes of Ariel's board   
of directors is elected each year. The classification of the Ariel board has    
the effect of requiring at least two annual stockholder meetings, instead of    
one, to replace a majority of the members of the board of directors. The MAYAN  
amended and restated articles of incorporation do not provide for a classified  
board.                                                                          

Directors. Ariel's restated certificate of incorporation provides that the
size of Ariel's board of directors shall be determined by the bylaws or an      
amendment to the bylaws, adopted by the stockholders or the board of directors, 
and the board currently consists of seven members. Board vacancies resulting    
from any increase in the authorized number of directors or any vacancies in the 
board resulting from death, resignation, removal or other cause may be filled   
by the affirmative vote of a majority of the directors then in office.          

MAYAN's bylaws, as amended, provide that the size of MAYAN's board of     
directors shall be determined by resolution of the board of directors, provided 
that there shall be at least three, and no more than six, members of the board  
of directors of MAYAN. MAYAN's current board consists of 6 directors. Vacancies 
and newly created directorships resulting from any increase in the authorized   
number of directors may be filled by approval of the board of directors or, if  
the number of directors that are in office is less than a quorum, by the        
unanimous written consent of the directors then in office, by the affirmative   
vote of a majority of the directors then in office pursuant to notice or        
waivers of notice complying with Section 307 of the California Corporations     
Code, or by a sole remaining director. The shareholders may elect a director or 
directors at any time to fill any vacancy or vacancies not filled by the        
directors, but any election by written consent shall require the consent of a   
majority of the outstanding shares entitled to vote. MAYAN's vacancy provisions 
are intended to prevent a shareholder from enlarging the board of directors and 
filling the new directorships with that shareholder's own nominees without the  
approval of the MAYAN board of directors.                                       

Directors' Committees. Ariel's restated bylaws provide that the board of  
directors may, by a resolution passed by a vote of a majority of the board of   
directors, designate one or more committees of the board, each comprised of one 
or more members of the Ariel board. To the extent provided in a resolution of   
Ariel's board of directors, these committees may exercise all the powers and    
authority of the board of directors in the                                      

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management of the business and affairs of Ariel, including, if the resolution   
expressly provides, the declaration of a dividend or the issuance of stock,     
except that no committee may:                                                   

(i) amend Ariel's certificate of incorporation or bylaws;             

(ii) adopt an agreement of merger or consolidation;                   

 (iii) recommend the sale, lease or exchange of all or substantially all
of Ariel's assets; or                                                       

(iv) recommend dissolution or revocation of a dissolution of Ariel.   

The MAYAN bylaws, as amended, provide that a majority of the board of     
directors may designate one or more committees of the board. To the extent      
provided in a resolution of the MAYAN board of directors, any committees of     
the MAYAN board of directors may exercise all the powers and authority of the   
board in the management of the business and affairs of MAYAN except that no     
committee may:                                                                  

(i) adopt, amend or repeal MAYAN's by-laws, as amended, or any one of 
them;                                                                       

(ii) approve or adopt, or recommend to MAYAN's stockholders any action
or matter expressly required by law to be submitted to the stockholders for 
approval;                                                                   

  (iii) fill vacancies on the board of directors or any committee thereof;

(iv) fix the compensation of the members serving on the board of      
directors or any committee thereof;                                         

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

(vi) distribute to shareholders of MAYAN, except at a rate, in a      
periodic amount or within a price range set forth in the articles of        
incorporation of MAYAN or determined by the board of directors of MAYAN; or 

 (vii) approve any other committees of the board of directors or members
of those committees.                                                        

 Majority Voting. Ariel's restated certificate of incorporation requires the
approval of the holders of a majority of the outstanding voting stock of Ariel  
to effect certain amendments to the restated certificate of incorporation with  
respect to:                                                                     

(i) the vote necessary to amend Ariel's bylaws or certificate of      
incorporation;                                                              

(ii) the size, classification and method of election of the board of  
directors;                                                                  

(iii) the conduct of stockholders' meetings and stockholder action by 
written consent; and                                                        

(iv) indemnification of directors, officers and others.               

In addition, Ariel's restated certificate of incorporation provides that  
directors are removable by the vote of the holders of a majority of Ariel's     
outstanding voting capital stock. Ariel's restated bylaws may be amended by     
the majority vote of the board of directors or by the vote of the holders of a  
majority of Ariel's outstanding voting capital stock.                           

 MAYAN's amended and restated articles of incorporation require the approval
of the holders of (i) a majority of the outstanding shares of common stock,     
voting separately as a class, (ii) a majority of the outstanding shares of      
Series A, Series B, Series C and Series D preferred stock, voting separately    
as a class and (iii) a majority of the outstanding shares of common stock,      
Series A, Series B, Series C and Series D preferred stock, voting together as   
a single class, to amend or repeal, or to adopt any provision inconsistent      
with, the amended and restated articles of incorporation with respect to the    
rights, powers and privileges of the respective classes of capital stock of     
MAYAN.                                                                          

MAYAN's bylaws, as amended, require the approval of 50% of the outstanding
voting stock of MAYAN to adopt new bylaws or amend or repeal the existing       
bylaws.                                                                         

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Special Meeting of Stockholders. Ariel's bylaws provide that special      
meetings of stockholders of Ariel may only be called by Ariel's chairman of the 
board, chief executive officer or president or at the request of a majority of  
the board of directors or the request of stockholders owning not less than 10%  
of Ariel's voting stock.                                                        

  MAYAN's bylaws, as amended, provide that special meetings of stockholders of
MAYAN may only be called by (i) the chairman of the board of directors, if any, 
(ii) a majority of that number of directors as constitutes a quorum, (iii) the  
president of MAYAN, (iii) the holders of shares entitled, in the aggregate, to  
cast not less than ten percent (10%) of the votes at the meeting, or (iv) by    
any other shareholder upon written request to, and subject to the approval of,  
an authorized officer of MAYAN.                                                 

 Stockholder Action by Written Consent. Ariel's restated bylaws provide that
Ariel's stockholders may take action at an annual or special meeting of         
stockholders of Ariel or by written consent without a meeting. Any action which 
may be taken at any meeting of shareholders may be taken by written consent, if 
the consent is signed by the holders of outstanding stock having not less than  
the minimum number of votes necessary to authorize or take that action at a     
meeting. MAYAN's amended and restated articles of incorporation and bylaws, as  
amended, similarly provide that stockholder action may be taken at a duly       
called annual or special meeting of stockholders or by written consent.         

Notice Procedures. Ariel's restated bylaws establish advance notice       
procedures with respect to all stockholder proposals to be brought before       
meetings of stockholders of Ariel, including proposals relating to the          
nomination of candidates for election as directors, the removal of directors    
and amendments to Ariel's restated certificate of incorporation or restated     
bylaws. These procedures provide that the notice must contain the consent of    
any nominee for election to the board of directors as well as certain           
information with respect to that nominee, a brief description of and reasons    
for any business desired to be brought before a meeting, the ownership interest 
of the proposing stockholder, and certain other information. Generally, to be   
timely, notice must be received by Ariel's secretary not less than 30 days      
prior to the meeting.                                                           

  MAYAN's bylaws, as amended, establish advance notice procedures with respect
to all annual meetings and special meetings of the shareholders of MAYAN. Under 
the notice procedures, written notice of any meeting of the shareholders of     
MAYAN must be provided to each shareholder entitled to vote at the meeting.     
Notice will be deemed to have been given to a shareholder at the time when the  
notice is delivered personally or deposited in the mail or sent by other means  
of written communication to the shareholder's address as it appears on the      
books of MAYAN or as provided by the shareholder to MAYAN for the purpose of    
notice. Unless statutory requirements dictate otherwise, the notices to the     
shareholders must be sent at least ten (10) days and no more than sixty (60)    
days before the date of the annual meeting or special meeting and must include  
the place, date and hour of the meeting. In addition, the notice to             
shareholders must include (i) in the case of an annual meeting, a description   
of those matters which the board of directors, at the time of giving notice,    
intends to present for action by the shareholders (the agenda is not limited,   
however, to matters described in the notice), or (ii) in the case of a special  
meeting, a description of the general nature of the business to be transacted   
and a statement that no other business will be transacted. The notice to        
shareholders of any meeting at which directors are to be elected shall also be  
required to include the name of the nominee or nominees whom, at the time of    
the notice, management intends to present for shareholder action.               

  The bylaws, as amended, do not explicitly authorize shareholders to nominate
directors for election at shareholder meetings. However, the bylaws, as         
amended, do provide that in the event a shareholder wishes to propose that      
business be transacted at a special meeting, the shareholder may submit a       
written request to authorized officers of MAYAN specifying the general nature   
of any proposed business. There is no specific date before, or time period      
during, which a written shareholder request must be received by an authorized   
officer of MAYAN in order to be considered timely. However, the notice          
procedures are intended to afford the board of directors an opportunity to      
consider the merit of shareholder proposals, and to the extent deemed           
appropriate by the board of directors, to inform the shareholders about those   
proposals. Therefore, a proposal has a better chance of being submitted to a    
full shareholder vote if the written request is delivered to MAYAN well in      

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advance of the special meeting at which the shareholder wishes to present his   
or her proposal for shareholder action.                                         

Limitations of Liability of Directors. Ariel's restated certificate of    
incorporation eliminates, to the maximum extent allowed by the Delaware General 
Corporation Law, a director's personal liability to Ariel or its stockholders   
for monetary damages for breaches of fiduciary duties. The certificate of       
incorporation does not, however, eliminate or limit the personal liability of a 
director for the following:                                                     

(i) any breach of the director's duty of loyalty to Ariel or its      
stockholders;                                                               

(ii) acts or omissions not in good faith or that involve intentional  
misconduct or a knowing violation of law;                                   

(iii) unlawful payments of dividends or unlawful stock repurchases or 
redemptions; or                                                             

(iv) any transaction from which the director derived an improper      
personal benefit.                                                           

MAYAN's amended and restated articles of incorporation limit the liability
of MAYAN's directors to the fullest extent permissible under California law.    

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OTHER ARIEL PROPOSALS 

Ariel's board of directors has approved an amendment to Ariel's restated  
certificate of incorporation to:                                                

.  increase the number of authorized shares of common stock from 40,000,000 
to          ; and                                                     

.  effect a one for    reverse stock split of the common stock of Ariel, to 
be effective immediately prior to the effective time of the merger.   

Ariel's board of directors is submitting this amendment for stockholder   
approval at the Ariel special meeting.                                          

In addition, Ariel's board of directors has approved the implementation of
the 2001 Stock Incentive Plan. Ariel's board of directors is submitting the     
2001 Stock Plan for stockholder approval at the Ariel special meeting.          

Ariel is also submitting for stockholder approval at the Ariel special    
meeting a proposal to elect each of the members of Ariel's current board of     
directors to serve until the earlier of (i) the completion of the term for      
which each was previously elected, (ii) the closing of the merger or (iii)      
until their successors are duly elected and qualified.                          

Proposal to Approve the Amendment to Ariel's Restated Certificate of            
Incorporation                                                                   

Increase in Authorized Shares                                                 

 Immediately prior to completion of the merger, Ariel estimates that it will
have approximately           shares of common stock outstanding or reserved     
for issuance after giving effect to the one for    reverse stock split to       
become effective immediately prior to the merger. Ariel's board of directors    
believes that it is advisable to increase the number of authorized shares of    
common stock in order to provide Ariel with sufficient shares to (1) complete   
the exchange of Ariel shares for the outstanding shares of MAYAN common stock   
in connection with the merger, (2) issue upon exercise of any of MAYAN's        
outstanding options or warrants and (3) issue upon conversion of MAYAN's        
outstanding convertible subordinated promissory notes. In addition, although    
Ariel has no specific plans to use the additional authorized shares of common   
stock, Ariel's board of directors believes that it is prudent to increase the   
number of authorized shares of common stock to the proposed level in order to   
provide for a reserve of shares available for issuance in connection with       
possible future actions. These actions could include equity financings,         
business acquisitions, corporate mergers, establishing strategic relationships  
with corporate partners, funding employee benefit plans, stock splits or stock  
dividends, and other general corporate purposes. However, having these          
additional authorized shares of common stock available for issuance would       
allow the board of directors to issue shares in the future without the delay    
and expense associated with seeking shareholder approval at that time.          
Eliminating the delays and expense occasioned by the necessity of obtaining     
shareholder approval will better enable Ariel, among other things, to engage    
in financing transactions and acquisitions as well as to take advantage of      
changing market and financial conditions on a more competitive basis, as        
determined by Ariel's board of directors.                                       

The additional shares of common stock to be authorized by adoption of the 
proposed amendment would have rights identical to the currently outstanding     
shares of common stock. Adoption of the proposed amendment and the future       
issuance of shares of common stock would not affect the rights of the holders   
of currently outstanding shares of common stock, except for effects incidental  
to increases in the number of outstanding shares of common stock at the time    
of any issuances. Any future issuance of shares of common stock will be         
subject to the rights of the holders of any outstanding shares of any           
preferred stock which Ariel may issue in the future.                            

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Reverse Stock Split                                                           

In order to decrease the number of shares that would be outstanding       
following the merger, the Ariel board has determined that it is in the best     
interest of Ariel and its stockholders to effect a one for    reverse stock     
split of the Ariel common stock immediately prior to completion of the merger.  

Vote Required                                                                 

Approval of the amendment to Ariel's restated certificate of incorporation
to effect the changes described above requires the affirmative vote of the      
holders of a majority of the outstanding shares of Ariel common stock.          

Recommendation of the Board of Directors                                      

The disinterested members of the Ariel board of directors have determined 
that the proposal to approve the amendment to Ariel's restated certificate of   
incorporation is in the best interest of Ariel and its stockholders, and        
unanimously recommend that Ariel stockholders vote "FOR" the amendment to       
Ariel's restated certificate of incorporation. Unless authority to do so is     
withheld, the person(s) named in each proxy will vote the shares represented    
thereby "For" the approval of the amendment to Ariel's restated certificate of  
incorporation.                                                                  

Proposal to Approve the Implementation of Ariel's 2001 Stock Incentive Plan     

Ariel's stockholders are being asked to approve the implementation of     
Ariel's 2001 Stock Incentive Plan. Ariel's board of directors adopted the 2001  
plan in       , subject to stockholder approval at the special meeting. The     
2001 plan will become effective on the date the merger with MAYAN is            
consummated.                                                                    

The 2001 plan is designed to allow Ariel to continue to utilize equity    
incentives to attract and retain the services of key individuals essential to   
Ariel's long-term growth and financial success. Equity incentives play a        
significant role in Ariel's efforts to remain competitive in the market for     
talented individuals, and Ariel relies on those incentives as a means to        
attract and retain highly qualified individuals in the positions vital to       
Ariel's success.                                                                

 The 2001 plan will serve as the successor to the Ariel existing stock plans
which include the 1992 Stock Option Plan, 1994 Stock Option Plan, 1995 Stock    
Option Plan and 1996 Directors Plan and as the successor to MAYAN's 1998 Stock  
Option/Stock Issuance Plan, as assumed by Ariel in connection with the merger.  
No further grants will be made under any of these plans, which will be          
collectively referred to in this proposal as the predecessor plans, and the     
outstanding options under the predecessor plans will at that time be            
transferred to the 2001 plan.                                                   

The following is a summary of the principal features of the 2001 plan. Any
stockholder who wishes to obtain a copy of the actual plan document may do so   
upon written request to Ariel at 2540 Route 130, Cranbury, New Jersey 08512.    

Equity Incentive Programs                                                     

 The 2001 plan consists of three separate equity incentive programs: (i) the
discretionary option grant program, (ii) the stock issuance program and (iii)   
the automatic option grant program for eligible non-employee board members. The 
principal features of each program are described below. The compensation        
committee of Ariel's board of directors will have the exclusive authority to    
administer the discretionary option grant and stock issuance programs with      
respect to option grants and stock issuances made to Ariel's executive officers 
and eligible non-employee board members and will also have the authority to     
make option grants and stock issuances under those programs to all other        
eligible individuals. However, Ariel's board of directors or any                

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secondary committee of one or more board members appointed by the board will    
also have separate but concurrent authority with the compensation committee to  
make option grants and stock issuances under those two programs to individuals  
other than executive officers and non-employee board members.                   

The term plan administrator, as used in this summary, will mean the       
compensation committee, the board of directors or any secondary committee, to   
the extent that entity is acting within the scope of its administrative         
authority under the 2001 plan. However, neither the compensation committee, the 
board of directors nor any secondary committee will exercise any administrative 
discretion under the automatic option grant program. All grants under the       
automatic option grant program will be made in strict compliance with the       
express provisions of that program.                                             

Share Reserve                                                                 

The number of shares of common stock initially reserved for issuance over 
the term of the 2001 plan will be limited to                    shares. That    
reserve will consist of the            shares estimated to be available for     
issuance under the predecessor plans, including the shares subject to           
outstanding options under the predecessor plans which will be transferred to    
the 2001 plan.                                                                  

The number of shares of common stock available for issuance under the 2001
plan will automatically increase on the first trading day of January of each    
calendar year, beginning with calendar year 2002, by an amount equal to         
percent (  %) of the total number of shares of Ariel's common stock outstanding 
on the last trading day of December the immediately preceding calendar year,    
but in no event will any annual increase exceed               shares.           

No participant in the 2001 plan may receive option grants, separately     
exercisable stock appreciation rights or direct stock issuances for more than   
            shares of Ariel common stock in total per calendar year, subject
to adjustment for subsequent stock splits, stock dividends and similar          
transactions. Stockholder approval of this proposal will also constitute        
approval of that          -share limitation for purposes of Internal Revenue    
Code Section 162(m).                                                            

The shares of Ariel common stock issuable under the 2001 plan may be drawn
from shares of Ariel's authorized but unissued common stock or from shares of   
Ariel's common stock which Ariel acquires, including shares purchased on the    
open market.                                                                    

Shares subject to any outstanding options under the 2001 plan which expire
or otherwise terminate prior to exercise or which are cancelled in accordance   
with the cancellation-regrant provisions of the discretionary option grant      
program will be available for subsequent issuance. Unvested shares issued under 
the 2001 plan and subsequently repurchased by Ariel, at the option exercise or  
direct issue price paid per share, pursuant to Ariel's purchase rights under    
the 2001 plan will be added back to the number of shares reserved for issuance  
under the 2001 plan and will accordingly be available for subsequent issuance.  
However, any shares subject to stock appreciation rights exercised under the    
2001 plan will not be available for reissuance.                                 

Eligibility                                                                   

Officers and employees, non-employee board members and independent        
consultants in Ariel's service or in the service of its parent and subsidiaries 
(whether now existing or subsequently established) will be eligible to          
participate in the discretionary option grant and stock issuance programs.      
Participation in the automatic option grant program will be limited to eligible 
non-employee members of Ariel's board of directors.                             

  As of May 15, 2001, approximately 77 employees, including five (5) executive
officers and five (5) non-employee board members, were eligible to participate  
in the discretionary option grant and stock issuance programs and five (5) non- 
employee board members were eligible to participate in the automatic option     
grant program.                                                                  

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Valuation                                                                     

  The fair market value per share of Ariel's common stock on any relevant date
under the 2001 plan will be deemed to be equal to the closing selling price per 
share on that date on the Nasdaq National Market. On May 21, 2001, the fair     
market value per share of Ariel's common stock determined on that basis was     
$0.82.                                                                          

Discretionary Option Grant Program                                            

  The plan administrator will have complete discretion under the discretionary
option grant program to determine which eligible individuals are to receive     
option grants, the time or times when those grants are to be made, the number   
of shares subject to that grant, the status of any granted option as either an  
incentive stock option or a non-statutory option under the federal tax laws,    
the vesting schedule (if any) to be in effect for the option grant and the      
maximum term for which any granted option is to remain outstanding.             

 Each granted option will have an exercise price per share determined by the
plan administrator, but the exercise price will not be less than one hundred    
percent of the fair market value of the option shares on the grant date. No     
granted option will have a term in excess of ten years. The shares subject to   
each option will generally vest in one or more installments over a specified    
period of service measured from the grant date. However, one or more options    
may be structured so that they will be immediately exercisable for any or all   
of the option shares. The shares acquired under those immediately exercisable   
options will be subject to repurchase by Ariel, at the exercise price paid per  
share, if the optionee ceases service prior to vesting in those shares.         

Upon cessation of service, the optionee will have a limited period of time
in which to exercise his or her outstanding options to the extent exercisable   
for vested shares. The plan administrator will have complete discretion to      
extend the period following the optionee's cessation of service during which    
his or her outstanding options may be exercised (up to the expiration of the    
option term) and/or to accelerate the exercisability or vesting of those        
options in whole or in part. That discretion may be exercised at any time while 
the options remain outstanding, whether before or after the optionee's actual   
cessation of service.                                                           

The plan administrator is authorized to issue tandem stock appreciation   
rights under the discretionary option grant program which will provide the      
holders with the right to surrender their options to Ariel for an appreciation  
distribution. The amount of the distribution payable by Ariel will be equal to  
the excess of (a) the fair market value of the vested shares of Ariel's common  
stock subject to the surrendered option over (b) the aggregate exercise price   
payable for those shares. That appreciation distribution may, at the discretion 
of the plan administrator, be made in cash or in shares of Ariel's common       
stock.                                                                          

The plan administrator will also have the authority to effect the         
cancellation of outstanding options under the discretionary option grant        
program (including options transferred from the predecessor plans) in return    
for the grant of new options for the same or a different number of option       
shares with an exercise price per share based upon the fair market value of the 
common stock on the new grant date.                                             

Stock Issuance Program                                                        

Shares may be issued under the stock issuance program at a price per share
not less than their fair market value, payable in cash or through a full        
recourse promissory note. Shares may also be issued as a bonus for past         
services without any cash outlay required of the recipient. Shares of Ariel's   
common stock may also be issued under the program pursuant to share right       
awards which entitle the recipients to receive those shares upon the attainment 
of designated performance goals or the completion of a designated service       
period. The plan administrator will have complete discretion under the program  
to determine which eligible individuals are to receive those stock issuances or 
share right awards, the time or times when those issuances or awards are to be  
made, the number of shares subject to that issuance or award and the vesting    
schedule to be in effect for the stock issuance or share rights award.          

The shares issued may be fully and immediately vested upon issuance or may
vest upon the completion of a designated performance goals or the satisfaction  
of specified service requirements. The plan administrator                       

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will, however, have the discretionary authority at any time to accelerate the   
vesting of any and all unvested shares outstanding under the stock issuance     
program.                                                                        

Outstanding share right awards under the program will automatically       
terminate, and no shares of Ariel's common stock will actually be issued in     
satisfaction of those awards, if the performance goals or service requirements  
established for those awards are not attained or satisfied. The plan            
administrator, however, will have the discretionary authority to issue shares   
of Ariel's common stock in satisfaction of one or more outstanding share right  
awards as to which the designated performance goals or service requirements are 
not attained or satisfied.                                                      

Automatic Option Grant Program                                                

Under the automatic option grant program, eligible non-employee members of
the board of directors will receive a series of option grants over their period 
of board service. Each eligible new non-employee board member will, at the time 
of his or her initial election or appointment to the board after the closing of 
the merger, receive an option grant for          shares of Ariel's common       
stock, provided that individual has not previously been in Ariel's service. On  
the date of each annual stockholders meeting held after the plan effective      
date, each individual who is to continue to serve as a non-employee board       
member will automatically be granted an option to purchase           shares of  
Ariel's common stock, provided he or she has served as a non-employee board     
member for at least six months.                                                 

The non-employee board members eligible to participate in the automatic   
option grant program will be limited to those who first become non-employee     
board members on or after the plan effective date, whether through appointment  
by the board or election by Ariel's stockholders, and those non-employee board  
members who continue to serve as non-employee board members at one or more      
annual stockholders meetings held after the plan effective date. There will be  
no limit on the number of those              -share annual option grants any    
one eligible non-employee board member may receive over his or her period of    
continued board service, and non-employee board members who have previously     
been in Ariel's employ will be eligible to receive one or more of those annual  
option grants over their period of board service.                               

Stockholder approval of this proposal will also constitute pre-approval of
each option granted under the automatic option grant program and the subsequent 
exercise of those options in accordance with the terms of the program           
summarized below.                                                               

  Each automatic grant will have an exercise price per share equal to the fair
market value per share of Ariel's common stock on the grant date and will have  
a maximum term of 10 years, subject to earlier termination following the        
optionee's cessation of board service. Each automatic option will be            
immediately exercisable for all of the option shares. However, any unvested     
shares purchased under that option will be subject to repurchase by Ariel, at   
the exercise price paid per share, should the optionee cease board service      
prior to vesting in those shares. The shares subject to each initial            
 -share automatic option grant will vest in a series of four
successive equal annual installments upon the optionee's completion of each     
year of board service over the four-year period measured from the grant date.   
The shares subject to each annual           -share automatic grant will vest in 
one installment upon the optionee's completion of one-year of board service     
over the one-year period measured from the grant date. However, the shares      
subject to each outstanding automatic option grant will immediately vest in     
full upon certain changes in control or ownership or upon the optionee's death  
or disability while a board member. Following the optionee's cessation of board 
service for any reason, each automatic option grant will remain exercisable for 
a 12-month period and may be exercised during that time for any or all shares   
in which the optionee is vested at the time of that cessation of board service. 

Limited Stock Appreciation Rights                                             

Limited stock appreciation rights may be granted under the discretionary  
option grant program to one or more of Ariel's officers or non-employee board   
members as part of their option grants, and each option granted                 

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under the automatic option grant program will automatically include that        
limited stock appreciation right. Upon the successful completion of a hostile   
tender offer for more than 50% of Ariel's outstanding voting securities while   
the optionee remains a board member, each outstanding option with a limited     
stock appreciation right may be surrendered to Ariel in return for a cash       
distribution. The amount of the distribution per surrendered option share will  
be equal to the excess of (i) the highest tender offer price paid per share in  
the hostile take-over over (ii) the exercise price payable per share under the  
surrendered option.                                                             

Stockholder approval of this proposal will also constitute pre-approval of
each limited stock appreciation right granted under the automatic option grant  
program and the subsequent exercise of that right in accordance with the        
foregoing terms.                                                                

Predecessor Plans                                                             

 All outstanding options under the predecessor plans transferred to the 2001
plan will continue to be governed by the terms of the agreements evidencing     
those options, and no provision of the 2001 plan will affect or otherwise       
modify the rights or obligations of the holders of the transferred options with 
respect to their acquisition of Ariel's common stock. However, the plan         
administrator has complete discretion to extend one or more provisions of the   
2001 plan to the transferred options, to the extent those options do not        
otherwise contain those provisions. No further option grants or stock issuances 
will be made under the predecessor plans following their termination upon the   
consummation of the merger with MAYAN.                                          

Ariel Stock Awards                                                            

The table below shows, as to Ariel's chief executive officer, each of the 
four other most highly compensated executive officers of Ariel (with base       
salary and bonus for the 2000 fiscal year in excess of $100,000) and the other  
individuals and groups indicated, the number of shares of common stock subject  
to option grants made under Ariel's predecessor stock plans from January 1,     
2000 through March 31, 2001, together with the weighted average exercise price  
payable per share. Ariel has not made any direct stock issuances to date under  
any of the Ariel predecessor plans.                                             

                                                                [Download Table]

                                                                  Weighted    
                                              Number of       Average Exercise
                                          Shares Underlying        Price      
           Name and Position             Options Granted (#)*  Per Share ($)* 
           -----------------             -------------------- ----------------
                                                                              
Dennis Schneider........................                            $         
 President and Chief Executive Officer                                        

Jay H. Atlas............................                            $         
 Former President and Chief Executive                                         
  Officer                                                                     

Richard Flocco, Jr......................                            $         
 VP of Operations                                                             

John Loprete............................                            $         
 Vice President--Finance                                                      

Eugene Corrado..........................                            $         
 VP of Sales                                                                  

Carlos G. Borgialli.....................                            $         
 Vice President--Engineering                                                  

All current executive officers as a                                           
 group (6 persons)......................                            $         

All current non-employee directors as a                                       
 group (5 persons)......................                            $         

All persons, including employees,                                             
 current officers who are not executive                                       
 officers, as a group (90 persons)......                            $         

--------                                                                        
*  After giving effect to the     for one reverse stock split which is expected 
to occur immediately prior to the effective time of the merger.           

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 As of April 30, 2001,           shares of common stock, after giving effect
to the one for    reverse stock split, were subject to outstanding options      
under the Ariel predecessor plans,        shares, after giving effect to the    
one for    reverse stock split, had been issued under those plans, and          
shares, after giving effect to the one for    reverse stock split, remained     
available for future issuance.                                                  

MAYAN Stock Awards                                                            

The table below shows, as to MAYAN's chief executive officer, each of     
MAYAN's four other most highly compensated executive officers (with base salary 
and bonus for the 2000 fiscal year in excess of $100,000) and the other         
individuals and groups indicated, the number of shares of common stock subject  
to option grants made under MAYAN's predecessor stock plan from January 1, 2000 
through March 31, 2001, together with the weighted average exercise price       
payable per share. MAYAN has not made any direct stock issuances to date under  
the MAYAN predecessor plan.                                                     

                                                                [Download Table]

                                                                 Weighted    
                                              Number of      Average Exercise
                                          Shares Underlying       Price      
           Name and Position             Options Granted (#)  Per Share ($)  
           -----------------             ------------------- ----------------
                                                                             
Daniel J. Gatti.........................      1,725,000           $0.19      
 President, Director and former Chief                                        
  Executive Officer(1)                                                       

Esmond Goei.............................        133,333           $   0      
 Chief Executive Officer(2)                                                  

Daniel W. Brown.........................        300,000           $0.36      
 Vice President of Product Marketing                                         

Julian C. Thomson.......................        400,000           $0.10      
 Former Vice President of Technology(3)                                      

Robert A. Hernandez.....................        350,000           $0.17      
 Former Vice President of Operations(4)                                      

Andrew M. Lovit.........................        350,000           $0.17      
 Former Vice President of Worldwide                                          
  Sales(5)                                                                   

All current executive officers as a                                          
 group (9 persons)......................      3,951,333           $0.31      

All current non-employee directors as a                                      
 group (4 persons)......................        100,000           $0.17      

All employees, including current                                             
 officers who are not executive                                              
 officers, as a group (291 persons).....     14,064,925           $0.28      

--------                                                                        
(1) Mr. Gatti's service as chief executive officer of MAYAN ceased in March     
2001.                                                                   

(2) Mr. Goei was appointed as the chief executive officer of MAYAN in March     
2001.                                                                   

(3) Mr. Thomson's service as Vice President of Technology and employment with   
MAYAN ceased in March 2001.                                             

(4) Mr. Hernandez' service as Vice President of Operations and employment with  
MAYAN ceased in March 2001.                                             

(5) Mr. Lovit's service as Vice President of Worldwide Sales and employment     
with MAYAN ceased in March 2001.                                        

As of March 31, 2001, 3,075,446 shares of common stock were subject to    
outstanding options under the MAYAN predecessor plan, 8,816,488 shares had been 
issued under that plan, and 2,730,644 shares remained available for future      
issuance.                                                                       

Cancellation and Regrant of Options. MAYAN's Plan Administrator has the   
authority to effect the cancellation of any or all options outstanding under    
the 1998 Stock Option/Stock Issuance Plan and to grant in substitution therefor 
new options covering the same or different numbers of shares of common stock    
but with an exercise price per share based upon the fair market value of the    
common stock on the new grant date.                                             

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On March 13, 2001, MAYAN cancelled options to purchase 110,500 shares of  
MAYAN's common stock previously granted to certain employees. These options had 
an original exercise price of $5.30. MAYAN replaced the cancelled options with  
new options for the same number of shares but with an exercise price of $0.75.  
The new options granted in replacement of the original options will become      
exercisable for those option shares in one or more installments over the        
optionee's period of continued service, with each such installment to vest on   
the same vesting date in effect for that installment under the cancelled        
higher-priced option. Under the FASB Interpretation No. 44 "Accounting for      
Certain Transactions Involving Stock Compensation," an Interpretation of APB    
No. 25, these options will be accounted for as variable grants. Accordingly,    
MAYAN will be required to recognize compensation expense equal to the intrinsic 
value, the difference between the exercise price of $0.75 and the fair value of 
MAYAN's common stock until the options are exercised, forfeited, or expire      
unexercised.                                                                    

New Plan Benefits                                                             

No stock option grants or direct stock issuances have been made to date   
under the 2001 plan.                                                            

General Provisions                                                            

Acceleration                                                                

In the event there should occur a change in control of Ariel, each        
outstanding option under the discretionary option grant program will            
automatically accelerate in full, unless assumed or otherwise continued in      
effect by the successor corporation or replaced with a cash incentive program   
which preserves the spread existing on the unvested option shares (the excess   
of the fair market value of those shares over the option exercise price payable 
for those shares) and provides for subsequent payout of that spread in          
accordance with the same vesting schedule in effect for those option shares. In 
addition, all unvested shares outstanding under the discretionary option grant  
and stock issuance programs will immediately vest, except to the extent Ariel's 
repurchase rights with respect to those shares are to be assigned to the        
successor corporation or otherwise continued in effect. The plan administrator  
will have complete discretion to grant one or more options under the            
discretionary option grant program which will become exercisable for all the    
option shares in the event the optionee's service with Ariel or the successor   
entity is terminated (actually or constructively) within a designated period    
following any change in control transaction in which those options are assumed  
or otherwise continued in effect. The vesting of outstanding shares under the   
stock issuance program is also structured to accelerate upon similar terms and  
conditions.                                                                     

The plan administrator will have the discretion to structure one or more  
option grants under the discretionary option grant program so that those        
options will immediately vest upon a change in control, whether or not the      
options are to be assumed or otherwise continued in effect. The vesting of      
outstanding shares under the stock issuance program may also be structured to   
accelerate upon similar terms and conditions. The shares subject to each option 
under the automatic option grant program will immediately vest upon any change  
in control transaction while the optionee remains a board member.               

  A change in control will be deemed to occur upon (i) an acquisition of Ariel
by merger or asset sale, (ii) the successful completion of a tender offer for   
more than 50% of Ariel's outstanding voting stock or (iii) a change in the      
majority of the board effected through one or more contested elections for      
board membership.                                                               

The acceleration of vesting in the event of a change in the ownership or  
control of Ariel may be seen as an anti-takeover provision and may have the     
effect of discouraging a merger proposal, a takeover attempt or other efforts   
to gain control of Ariel.                                                       

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Stockholder Rights And Option Transferability                               

No optionee will have any stockholder rights with respect to the option   
shares until that optionee has exercised the option and paid the exercise price 
for the purchased shares. Options are not assignable or transferable other than 
by will or the laws of inheritance following optionee's death, and during the   
optionee's lifetime, the option may only be exercised by the optionee. However, 
non-statutory options may be transferred or assigned during optionee's lifetime 
to one or more members of the optionee's family or to a trust established for   
one or more of those family members or to the optionee's former spouse, to the  
extent that transfer is in connection with the optionee's estate plan or        
pursuant to a domestic relations order.                                         

Changes in Capitalization                                                   

  In the event any change is made to the outstanding shares of common stock by
reason of any recapitalization, stock dividend, stock split, combination of     
shares, exchange of shares or other change in corporate structure effected      
without Ariel's receipt of consideration, appropriate adjustments will be made  
to (i) the maximum number and/or class of securities issuable under the 2001    
plan, (ii) the maximum number and/or class of securities for which any one      
person may be granted stock options, separately exercisable stock appreciation  
rights and direct stock issuances under the 2001 plan per calendar year, (iii)  
the number and/or class of securities for which grants are subsequently to be   
made under the automatic option grant program to new and continuing non-        
employee board members, (iv) the number and/or class of securities and the      
exercise price per share in effect under each outstanding option and under each 
installment of option shares scheduled to vest or become exercisable            
subsequently pursuant to that option, (v) the number and/or class of securities 
and the exercise price per share in effect under each outstanding option        
transferred from each predecessor plan to the 2001 plan and under each          
installment of option shares scheduled to vest or become exercisable            
subsequently pursuant to that option and (vi) the maximum number and/or class   
of securities by which the share reserve under the 2001 plan is to increase     
automatically each year. Those adjustments will be designed to preclude any     
dilution or enlargement of benefits under the 2001 plan or the outstanding      
options thereunder.                                                             

Financial Assistance                                                        

The plan administrator may institute a loan program to assist one or more 
participants in financing the exercise of outstanding options under the         
discretionary option grant program or the purchase of shares under the stock    
issuance program through full-recourse interest-bearing promissory notes.       
However, the maximum amount of financing provided any participant may not       
exceed the cash consideration payable for the issued shares plus all applicable 
taxes incurred in connection with the acquisition of those shares.              

Special Tax Election                                                        

The plan administrator may provide one or more holders of non-statutory   
options or unvested share issuances under the 2001 plan (other than the options 
granted or the shares issued under the automatic option grant program) with the 
right to have Ariel withhold a portion of the shares otherwise issuable to      
those individuals in satisfaction of the withholding taxes to which those       
individuals become subject in connection with the exercise of those options or  
the vesting of those shares. Alternatively, the plan administrator may allow    
those individuals to deliver previously acquired shares of common stock in      
payment of that withholding tax liability.                                      

Amendment and Termination                                                   

The board may amend or modify the 2001 plan at any time, subject to any   
required stockholder approval pursuant to applicable laws and regulations.      
Unless sooner terminated by the board, the 2001 plan will terminate on the      
earliest of (i) the tenth anniversary of the plan effective date, (ii) the date 
on which all shares available for issuance under the 2001 plan have been issued 
as fully-vested shares or (iii) the termination of all outstanding options in   
connection with certain changes in control or ownership of Ariel.               

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Federal Income Tax Consequences                                               

Option Grants                                                               

Options granted under the 2001 plan may be either incentive stock options 
which satisfy the requirements of Section 422 of the Internal Revenue Code or   
non-statutory options which are not intended to meet those requirements. The    
Federal income tax treatment for the two types of options differs as follows:   

Incentive Options. No taxable income is recognized by the optionee at the 
time of the option grant, and no taxable income is generally recognized at the  
time the option is exercised. The optionee will, however, recognize taxable     
income in the year in which the purchased shares are sold or otherwise made the 
subject of a taxable disposition. For Federal tax purposes, dispositions are    
divided into two categories: (i) qualifying and (ii) disqualifying. A           
qualifying disposition occurs if the sale or other disposition is made more     
than two (2) years after the date the option for the shares involved in that    
sale or disposition is granted and more than one (1) year after the date the    
option for those shares is exercised. If the sale or disposition occurs before  
these two periods are satisfied, then a disqualifying disposition will result.  

  Upon a qualifying disposition, the optionee will recognize long-term capital
gain in an amount equal to the excess of (i) the amount realized upon the sale  
or other disposition of the purchased shares over (ii) the exercise price paid  
for the shares. If there is a disqualifying disposition of the shares, then the 
excess of (i) the fair market value of those shares on the exercise date over   
(ii) the exercise price paid for the shares will be taxable as ordinary income  
to the optionee. Any additional gain or loss recognized upon the disposition    
will be recognized as a capital gain or loss by the optionee.                   

If the optionee makes a disqualifying disposition of the purchased shares,
then Ariel will be entitled to an income tax deduction, for the taxable year in 
which that disposition occurs, equal to the excess of (i) the fair market value 
of those shares on the option exercise date over (ii) the exercise price paid   
for the shares. If the optionee makes a qualifying disposition, Ariel will not  
be entitled to any income tax deduction.                                        

Non-Statutory Options. No taxable income is recognized by an optionee upon
the grant of a non-statutory option. The optionee will in general recognize     
ordinary income, in the year in which the option is exercised, equal to the     
excess of the fair market value of the purchased shares on the exercise date    
over the exercise price paid for the shares, and the optionee will be required  
to satisfy the tax withholding requirements applicable to that income.          

If the shares acquired upon exercise of the non-statutory option are      
unvested and subject to repurchase by Ariel in the event of the optionee's      
termination of service prior to vesting in those shares, then the optionee will 
not recognize any taxable income at the time of exercise but will have to       
report as ordinary income, as and when Ariel's repurchase right lapses, an      
amount equal to the excess of (i) the fair market value of the shares on the    
date the repurchase right lapses over (ii) the exercise price paid for the      
shares. The optionee may, however, elect under Section 83(b) of the Internal    
Revenue Code to include as ordinary income in the year of exercise of the       
option an amount equal to the excess of (i) the fair market value of the        
purchased shares on the exercise date over (ii) the exercise price paid for     
those shares. If the Section 83(b) election is made, the optionee will not      
recognize any additional income as and when the repurchase right lapses.        

Ariel will be entitled to an income tax deduction equal to the amount of  
ordinary income recognized by the optionee with respect to the exercised non-   
statutory option. The deduction will in general be allowed for the taxable year 
of Ariel in which that ordinary income is recognized by the optionee.           

Stock Appreciation Rights                                                   

 No taxable income is recognized upon receipt of a stock appreciation right.
The holder will recognize ordinary income, in the year in which the stock       
appreciation right is exercised, in an amount equal to the excess of the fair   
market value of the underlying shares of common stock on the exercise date over 
the base price in effect for the exercised right, and the holder will be        
required to satisfy the tax withholding requirements applicable to that income. 

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Ariel will be entitled to an income tax deduction equal to the amount of  
ordinary income recognized by the holder in connection with the exercise of the 
stock appreciation right. The deduction will be allowed for the taxable year in 
which that ordinary income is recognized.                                       

Direct Stock Issuances                                                      

 The tax principles applicable to direct stock issuances under the 2001 plan
will be substantially the same as those summarized above for the exercise of    
non-statutory option grants.                                                    

Deductibility of Executive Compensation                                     

  Ariel anticipates that any compensation deemed paid by it in connection with
the disqualifying disposition of incentive stock option shares or the exercise  
of non-statutory options with exercise prices equal to the fair market value of 
the option shares on the grant date will qualify as performance-based           
compensation for purposes of Code Section 162(m) and will not have to be taken  
into account for purposes of the $1 million limitation per covered individual   
on the deductibility of the compensation paid to certain executive officers of  
Ariel. Accordingly, all compensation deemed paid with respect to those options  
will remain deductible by Ariel without limitation under Code Section 162(m).   

Accounting Treatment                                                          

Option grants under the discretionary option grant and automatic option   
grant programs with exercise prices equal to the fair market value of the       
option shares on the grant date will not result in any direct charge to Ariel's 
reported earnings. However, the fair value of those options is required to be   
disclosed in the notes to Ariel's financial statements, and Ariel must also     
disclose, in footnotes to its financial statements, the pro-forma impact those  
options would have upon its reported earnings were the fair value of those      
options at the time of grant treated as a compensation expense. In addition,    
the number of outstanding options may be a factor in determining Ariel's        
earnings per share on a fully-diluted basis.                                    

Any option grants made to non-employee consultants (but not non-employee  
board members) will result in a direct charge to Ariel's reported earnings      
based upon the fair value of the option measured initially as of the grant date 
and then subsequently on the vesting date of each installment of the underlying 
option shares. That charge will accordingly include the appreciation in the     
value of the option shares over the period between the grant date of the option 
and the vesting date of each installment of the option shares. Should any       
outstanding options under the 2001 plan be repriced, then that repricing will   
also trigger a direct charge to Ariel's reported earnings measured by the       
appreciation in the value of the underlying shares between the grant of the     
repriced option and the date the repriced option is exercised for those shares  
or terminates unexercised.                                                      

Should one or more individuals be granted tandem stock appreciation rights
under the 2001 plan, then those rights would result in a compensation expense   
to be charged against Ariel's reported earnings. Accordingly, at the end of     
each fiscal quarter, the amount (if any) by which the fair market value of the  
shares of common stock subject to those outstanding stock appreciation rights   
has increased from the prior quarter-end would be accrued as compensation       
expense, to the extent that fair market value is in excess of the aggregate     
exercise price in effect for those rights.                                      

Vote Required                                                                 

The affirmative vote of at least a majority of the shares of common stock 
present in person or by proxy at the special meeting and entitled to vote is    
required for approval of the implementation of the 2001 plan. Should that       
stockholder approval not be obtained, then the 2001 plan will not be            
implemented. However, in that event, each of the predecessor plans will remain  
in effect, and stock option grants and share issuances will continue to be made 
under those plans until the available share reserve under each of those plans   
has been issued.                                                                

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Recommendation of the Board of Directors                                      

The members of the Ariel board of directors have determined that the      
proposal to approve the implementation of the 2001 Stock Incentive Plan is in   
the best interest of Ariel and its stockholders, and unanimously recommend that 
Ariel stockholders Vote "FOR" approval of the implementation of the 2001 Stock  
Incentive Plan. Unless authority to do so is withheld, the person(s) named in   
each proxy will vote the shares represented thereby "For" the approval of       
implementation of the 2001 Stock Incentive Plan.                                

Proposal to Elect Ariel's Current Board of Directors                            

Directors will be elected at the Special Meeting. The Company's Board of  
Directors currently is composed of seven directors. The Board of Directors is   
divided into three classes and the members of each class are elected at the     
Annual Meeting of the stockholders held in the year in which the terms of that  
class expires. Messrs. Agnello and Paul have terms expiring in 2001. Messrs.    
Atlas and Goei have terms expiring in 2002. Messrs. Schneider, Fuchs and        
Burlinson have terms expiring 2003. The incumbent board serves as nominating    
committee for new directors.                                                    

On or about March 1, 2001, Ariel's charter was voided because of the      
inadvertent failure to file its annual report for the years 2000 and 1999 with  
Delaware and pay the annual franchise taxes due to the state of Delaware. The   
charter was revived on March 21, 2001 by filing a Certificate of Renewal with   
the Secretary of State of the State of Delaware, and paying all fees and        
charges due. Section 312 of the Delaware General Corporation Law provides that  
upon filing such a certificate, the corporation "shall be renewed and revived   
with the same force and effect as if its certificate of incorporation had not   
been" voided and all actions taken by the corporation during the period that    
the certificate was void shall be valid. Section 312 also requires that         
whenever a Delaware corporation's charter has been voided and then been         
reinstated as permitted under such section, a special meeting of the            
shareholders shall be called and held to re-elect a full board of directors.    
Accordingly, Ariel is submitting the names of the board of directors, Messrs.   
Agnello, Paul, Atlas, Goei, Schneider, Fuchs and Burlinson, to be re-elected as 
directors in the classes in which they are now serving. If the merger           
transaction with MAYAN is consummated, all of these individuals, with the       
exception of Messrs. Goei and Agnello, will then resign and the individuals     
identified under the caption "The Merger-Management Following the Merger" on    
page 88 will be appointed pursuant to the terms of the merger agreement.        

Proxies received in response to this solicitation will be voted for the   
election of all these directors unless otherwise specified in the proxy. The    
Board of Directors have no reason to believe that the nominees will decline or  
be unable to serve as a director of the Company.                                

Recommendation of the Board of Directors                                      

The members of the Ariel board of directors have determined that the      
election of each of the members of Ariel's current board of directors to serve  
until the earlier of (i) the completion of the term for which each was          
previously elected, (ii) the closing of the merger or (iii) until their         
successors are duly elected and qualified is in the best interest of Ariel and  
its stockholders, and unanimously recommend that Ariel stockholders Vote "FOR"  
election of Messrs. Agnello, Goei, Paul, Burlinson, Fuchs, Schneider and Atlas. 
Unless authority to do so is withheld, the person(s) named in each proxy will   
vote the shares represented thereby "For" election of Messrs. Agnello, Goei,    
Paul, Burlinson, Fuchs, Schneider and Atlas.                                    

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MARKET PRICE INFORMATION

Ariel Market Price Data                                                         

Ariel's common stock has traded on the Nasdaq National Market under the   
symbol "ADSP" since January 24, 1995. The following table sets forth the high   
and low sales prices reported on the Nasdaq National Market for Ariel common    
stock for the periods indicated.                                                

                                                                [Download Table]

                                                               High    Low  
                                                              ------- ------
                                                                            
Fiscal Year Ended December 31, 1999                                         
First Quarter................................................ $ 3.375 $1.625
Second Quarter...............................................   3.938  2.000
Third Quarter................................................   6.563  1.875
Fourth Quarter...............................................  37.000  2.750

Fiscal Year Ended December 31, 2000                                         
First Quarter................................................ $12.375 $6.750
Second Quarter...............................................   7.813  2.563
Third Quarter................................................   3.438  1.344
Fourth Quarter...............................................   2.438  0.563

Fiscal Year Ending December 31, 2001                                        
First Quarter................................................ $1.7188 $0.781
Second Quarter (through May 15, 2001)........................   1.160  0.860

MAYAN Market Price Data                                                         

There is no established public trading market for MAYAN common stock.     

Recent Closing Prices                                                           

 On March 28, 2001, the last trading day before announcement of the proposed
merger, the closing price per share of Ariel common stock on the Nasdaq         
National Market was $1.3438. On March 23, 2001, five business days before       
announcement of the proposed merger, the closing price per share of Ariel       
common stock on the Nasdaq National Market was $1.1562. On May 21, 2001, the    
latest practicable trading day before the printing of this document, the        
closing price per share of Ariel common stock on the Nasdaq National Market was 
$0.82.                                                                          

Because the market price of Ariel common stock is subject to fluctuation, 
the market value of the shares of Ariel common stock that holders of MAYAN      
capital stock will receive in the merger may increase or decrease prior to and  
following the merger. We urge stockholders to obtain current market quotations  
for Ariel common stock. No assurance can be given as to the future prices or    
markets for Ariel common stock or the common stock of the combined company.     

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INFORMATION ABOUT ARIEL 

General                                                                         

  Ariel is a provider of open systems-based digital remote access equipment to
Internet Service Providers ("ISPs"). Ariel's remote access equipment is         
compatible with open systems platforms running a variety of popular operating   
systems, including Windows NT and Linux, and enables ISPs to build reliable,    
scalable and easy to manage networks at a cost that is significantly below      
other available alternatives.                                                   

 Remote access equipment enables a user dialing in over a standard telephone
line to connect to a computer network. Because of the significant increase in   
Internet users, ISPs are faced with the challenge of providing access to a      
growing number of subscribers, including those subscribers who are staying      
connected to the Internet for longer periods of time. In addition, ISPs must    
also find cost effective ways to expand their networks and computer systems to  
provide additional services such as Internet telephony, fax and voice over the  
Internet and unified messaging. Ariel's products enable ISPs to use standard PC 
Systems to build remote access server concentrators (the equipment used to      
connect multiple users simultaneously to the Internet). Leveraging Ariel's      
expertise and experience in developing digital signal processing systems and    
led by new senior management, Ariel is targeting the approximately 8,000 small  
to mid-sized ISPs (with less than 100,000 subscribers).                         

In 1999 Ariel introduced a new family of dial-up Internet access solutions
it calls the PowerPOP architecture, which leverages industry standard hardware, 
software and applications. Ariel's PowerPOP architecture enables Ariel to take  
advantage of the increasing performance and plummeting prices of PC-based       
Systems to provide ISPs with more responsive, reliable and flexible networks    
while significantly reducing capital equipment costs and simplifying network    
and systems management. Ariel sells its products to ISPs primarily through one  
distributor.                                                                    

  Ariel has historically provided, and will continue to provide, remote access
products and digital signal processing (DSP) products to OEMs who integrate     
Ariel's components into their products. Because integration of Ariel's complex  
components involves a significant amount of technical development and testing   
by the OEM, Ariel's product is generally used for the duration of the OEM's     
product-life. Ariel sells its products to OEMs though its direct sales force.   
Ariel intends to continue to offer its component products to OEMs, including    
those OEMs who sell products in the ISP market.                                 

Ariel's Corporate History                                                       

Founded in 1982, Ariel was one of the first providers of digital signal   
processing application development tools. In the mid-1990s, Ariel evolved from  
being a provider of digital signal processing application development tools to  
supplying digital signal processing-based subsystems to OEMs and government     
contractors. Ariel's products are incorporated into a variety of applications,  
including medical instrumentation, machine vision, professional audio, sonar,   
radar and multimedia.                                                           

In the mid-1990s, Ariel introduced a series of products aimed at the      
computer telephony integration market. Computer telephony integration products  
provide additional functionality which allows standard computers to connect to  
telephone lines, initiate, receive, transmit, store and otherwise manipulate    
voice and data telephone communications. Ariel's initial product, the CTI       
Modem, is used for Internet access, online services and transaction processing. 

  In 1996, Ariel formed a communications systems group to begin development of
an Asymmetrical Digital Subscriber Line ("ADSL") carrier-class product          
targeting the needs of major telecommunications and network service providers.  
ADSL adds a high-speed data connection to a standard voice telephone line.      
Carrier-class is a term used to describe equipment that meets the stringent     
reliability and environmental needs of telephone carriers. As a result of       
Ariel's strategic decision to reposition itself in 1997, Ariel decided to sell  
its communications systems group, and in September 1998, Ariel completed the    
sale of the group's assets to Cabletron Systems, Inc. for approximately $30     
million.                                                                        

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In 1997, Ariel also announced its intent to focus on the remote access    
equipment market through product offerings that provide high density and cost   
effective remote access solutions based on industry standard PC platforms.      
Ariel developed a Windows NT-based remote access solution, which was adopted by 
Compaq. By late 1998, widespread use of the Internet and improved Internet      
security led enterprises to outsource their remote access needs to ISPs. As a   
result, Compaq changed their strategy and there were no revenues from Compaq in 
2000 and 1999 as compared to $4.4 million in 1998.                              

 While sales to OEM customers generate a majority of Ariel's revenues, today
Ariel is focused on developing and marketing remote access solutions that       
leverage industry standard hardware, software and applications to small and     
mid-sized ISPs and competitive local exchange carriers (CLECs).                 

Industry Overview                                                               

The ISP Market                                                                

The Internet has emerged as a global communications medium, enabling      
millions of people to gather information, communicate and conduct business      
electronically. International Data Corporation estimates that there were        
approximately 250 million Internet users worldwide in 2000 and that the number  
of users will grow to over 500 million by the end of 2003. As a result, the     
demand for equipment to expand Internet access is growing at an unprecedented   
rate.                                                                           

ISPs are commonly grouped into categories based on the size of their      
customer or subscriber base. Large ISPs are generally those with more than      
100,000 subscribers. These include ISPs such as America Online, EarthLink, The  
Microsoft Network, AT&T, Concentric Network and MCI WorldCom. Mid-sized ISPs    
typically have between 20,000 and 100,000 subscribers and are generally focused 
in a defined geography, either a metropolitan area or region. Small ISPs have   
under 20,000 subscribers. Boardwatch Magazine's directory of ISPs lists more    
than 8,000 small and mid-sized ISPs in the United States.                       

 The vast majority of Internet access is through dial-up or analog telephone
connections using a PC and a modem. An ISP's network consists of POPs           
established in various locations throughout its service area, and a network     
operations center where the ISP's high speed connection to the Internet         
resides. When a subscriber's call reaches the POP, it is connected to a port. A 
port is one of many modems located within a remote access concentrator, which   
allows multiple persons to be connected simultaneously. The subscriber's call   
is converted to a digital network connection in the POP from which an ISP       
maintains a high-bandwidth connection called the backhaul- connecting the POPs  
to its network operations center.                                               

As demand for Internet access grows, ISPs are expanding the number of POPs
that they maintain and are increasing the number of ports within many of their  
POPs to accommodate a growing number of new subscribers and subscribers staying 
connected to the Internet for longer periods of time. Remote access server      
concentrators range in size from 24 ports to hundreds of ports, with the        
highest sales volume models generally supporting 48 to 96 ports.                

Market Trends                                                                 

Due to a broad combination of factors including deregulation of the       
telecommunication industry, competition between network service providers and   
advances in technology, ISPs are experiencing significant change. In this       
context, Ariel believes it is well positioned to take advantage of the          
following major trends in its industry:                                         

Proliferation of PC-Based Servers. Remote access concentrators have       
traditionally been designed as closed "black box" systems using proprietary     
hardware and software. Customer-driven modifications or the need for additional 
features can only be accommodated by each respective manufacturer, which can be 
expensive and slow to market. Further, given that the systems are proprietary,  
end users are required to understand the specific details associated with each  
system. The combination of the increase in the processing                       

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power of PC central processing units, and the rapid maturation of PC operating  
systems such as Windows NT/Windows 2000 and Linux, have enabled the functions   
of a remote access concentrator to be delivered as an upgrade to a standard PC  
server instead of requiring a "black box." This approach offers ISPs many       
advantages, including equipment cost savings of up to approximately 40% (due in 
part to decreasing PC prices) and easier operation. Ariel believes that the     
remote access market will transition from using special-built boxes to industry 
standard hardware, software, applications and development tools as a result of  
the advances in performance, scalability and reliability of open systems.       

 Demand for New Services. Advances in the technology underlying the Internet
have made it possible to use the Internet to carry two-way voice conversations. 
To remain competitive, ISPs must offer new services including voice and fax     
services using voice over the Internet protocol ("VOIP") and fax over the       
Internet protocol ("FOIP"). The system requirements imposed by these and other  
new services will strain the capabilities of existing networking equipment. In  
particular, it is impossible to upgrade many remote access concentrators to     
provide voice call handling, or, where upgrades are available, their cost can   
significantly exceed the purchase price of the original equipment. ISPs         
expanding their services to add voice and fax services must often purchase      
entirely new remote access concentrators.                                       

Emergence of CompactPCI Standard to Meet Telco Needs. Supported by many   
industry leaders, the CompactPCI standard enables the development of equipment  
using PC system standards that meet the requirements for high reliability       
carrier-grade applications. Ariel was the first company to offer CompactPCI     
remote access plug-in cards that adhere to this new standard. Improvements in   
open Systems capabilities, price reductions and the advent of CompactPCI        
combine to create new opportunities for standards-based systems in high-end ISP 
environments.                                                                   

Ariel's Approach                                                                

Ariel has developed a new ISP network architecture and a new family of    
products that enable ISPs and other network service providers to build and      
scale their infrastructure using open systems platforms. The proprietary means  
by which Ariel has integrated its products' capabilities into standard PCs      
enables its products to more fully and more easily integrate the                
hardware/system/network models expected by Windows NT, Windows 2000 and Linux   
operating systems. This ensures compatibility with the full repertoire of       
communications systems services and applications built for these operating      
systems.                                                                        

  Introduced in 1999, the PowerPOP architecture is a new approach to designing
ISP networks. The PowerPOP architecture provides an alternative to the dumb     
remote access concentrators that ISPs currently use to equip POPs. The PowerPOP 
architecture combines standard PC servers running a standard off-the-shelf PC   
operating system (Windows NT or Linux) with one or more of Ariel's plug-in      
cards. ISPs use these new servers to perform all the functions of a remote      
access concentrator and to enable the POP to autonomously provide critical      
network services. The typical ISP network architecture is based on a central    
network operations center, connected to a number of dumb POPs. These include    
services needed to obtain the numerical addresses of Internet Resources         
("Domain Name Services"), the mechanisms that allow a subscriber to log in to   
an ISP's network with a user name and password (called RADIUS) and tools to     
improve the response time for both recently and frequently accessed web content 
(called web caching).                                                           

  By providing key network services at the POPs, ISPs can significantly reduce
network traffic between the POPs and their network operating centers, thereby   
improving response time, reducing backhaul requirements and improving operating 
performance. This also enables ISPs to significantly reduce equipment costs     
while increasing the flexibility, efficiency, manageability and scalability of  
their networks.                                                                 

New ISPs face the challenge of building an entirely new network from      
scratch. These ISPs can also use the PowerPOP architecture to substantially     
reduce the initial cost and complexity of their network. A traditional approach 
would require a minimum of three boxes--a remote access concentrator, a PC      
server and a router--for connection to the Internet. Using the PowerPOP         
architecture, all the services and capabilities                                 

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required to become an ISP can be deployed in a single PC server system.         
Additional capacity can be added by installing additional systems either in the 
network operations center or in new remote POPs.                                

PowerPOP offers ISPs the following benefits:                              

 Reduced Equipment Costs. Ariel believes its PowerPOP architecture redefines
the economics of remote access. Using a standards-based platform reduces        
equipment costs and operating expenses. By leveraging the price erosion and     
performance increases in PC systems and compared to traditional remote access   
equipment, a solution built with Ariel's technology can be priced at            
approximately 40% less per port using standard rackmount PC Systems and open    
standard operating systems such as Windows NT and Linux;                        

Deliver Better Performance to Subscribers. Placing key network services   
closer to the user creates a more responsive network by reducing the time it    
takes for subscribers' requests to be filled. In addition, PC-based systems in  
the POPs have additional available computing capacity that ISPs can use to      
deploy new services;                                                            

Build More Reliable and Manageable Networks. In a traditional ISP network 
design, servers at the network operations center provide critical network       
services. ISPs install multiple redundant servers to avoid having a critical    
service outage and a backup server automatically takes the place of one that    
fails. Ariel's PowerPOP architecture uses the PC systems in POPs to duplicate   
these previously centralized services into each POP with built-in backup        
Systems; and                                                                    

 Add New Services with a Software Upgrade. Ariel's technology, and the power
available in today's PC servers, enable the upgrade of Ariel's data access      
solutions from a data-only remote access service to full support of Internet    
telephony without requiring new hardware. As a result, ISPs will be able to     
offer VOIP and FOIP services using network-updateable software.                 

Products                                                                        

 In 2000 Ariel offered two families of products: remote access products that
are sold to ISPs and OEMs and high-performance general purpose digital signal   
processing (DSP) products that are sold only to OEM customers for inclusion in  
their products. In June 2000 Ariel notified its DSP customers that Ariel would  
no longer offer certain DSP products due to the lack of availability of         
component parts and the prohibitive cost of production, testing and technical   
support for these older products.                                               

  Remote Access Products. Ariel's remote access products are plug-in cards and
software that enable standards-based systems to provide remote access services  
using off-the-shelf operating systems such as Windows NT and Linux. Plug-in     
cards are electronic circuits that are compatible with the system expansion     
connectors built into standard PC systems.                                      

In 1999 Ariel launched its fourth generation of remote access products for
Windows NT and Linux, the RS4200 family, based upon the Ariel Access            
Architecture and incorporating the most recent developments in digital signal   
processing technology. The RS4200 family was built to meet the demanding        
requirements of both ISPs and OEM specifications.                               

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In 2000 Ariel introduced its BypaSS7 gateway by connecting additional     
hardware and software to PCs equipped with its RS4200. BypaSS7 adds system      
signaling software used in the public system telephone network (PSTN) and       
allows ISPs and CLECs to offer low cost network access via inter-machine trunk  
lines (IMTs) . BypaSS7 is currently available for data connections to the PSTN  
and is the first complete system solution offered by Ariel including            
installation and service.                                                       

                                                                [Download Table]

 Product            Technical Specifications                            Date   
 -------            ------------------------                            ----   
                                                                               
 RS4200............ 2 PCI card set; Up to 120 DSP-based Modems, V.90,   1999   
                     FOIP and VOIP capable; 4 T1/E1 Telco Interfaces,          
                     Windows NT and Linux                                      
 BypaSS7........... Dual Redundant SUN Netra-T Solaris servers,         2000   
                     proprietary SS7 Signaling application uses ADC            
                     NewNet SS7 stack                                          
 RS2000............ PCI; Up to 30 V.90 Digital Modems 2 T1/E1 Telco     1998   
 RS2000C........... CompactPCI bus; Up to 30 Digital V.90 Modems; 2     1998   
                     T1/E1 Telco Interfaces                                    
 RS1000............ 2 PCI card set; Up to 30 56K Modems 2 T1/E1 Telco   1997   
 T1 Modem Plus..... ISA bus; Up to 30 Analog Modems, 56K Capable        1996   
 T1 Modem.......... ISA bus; Up to 30 Analog Modems                     1996   

   Digital Signal Processing Products. Ariel's family of general purpose, high 
performance digital signal processing products for OEMs uses the industry-     
standard VMEbus and the PC standard ISAbus, and are aimed at applications in   
audio, instrumentation/telemetry, radar, sonar, and imaging. OEMs selecting    
high performance digital signal processing products do so for the life of their
project, therefore OEMs tend to continue to purchase these products for many   
years after the design is no longer state of the art.                          


      Product*      Technical Specifications                            Date   
      --------      ------------------------                            ----   
                                                                               
 DC-5.............. ISA: Custom-built Telco/Modem                       1994   
 COMMIO/IP......... VME: DSP320C40; modular expansion for signal        1995   
                     Input/Output                                              
 DSP 56............ ISA: DSP56001; 2 channels of Auto Input/Output      1988   
 DSP 96............ ISA: DSP96002; 2 channels of Audio Input/Output     1990   
 DSP C40........... ISA: DSP320C40; 2 channels of Audio Input/Output    1993   
 HYDRA II & VSB.... VME: Quad DSP320C40                                 1995   
 KEOPS............. PCI: Quad DSP3210 with optical Audio Input/Output   1995   
 VC 40/HYDRA PLUS.. VME: Quad DSP320C40                                 1995   

--------                                                                        
* In June 2000 Ariel notified its DSP customers that Ariel would no longer      
 offer certain DSP products due to the lack of availability of component parts
and the prohibitive cost of production, testing and technical support for   
these older products, therefore, these products are no longer generally     
available after December 31, 2000.                                          

Research and Development                                                        

Ariel believes that strong product development capabilities as well as    
enhancements and upgrades to Ariel's present products are essential to its      
strategy of building on its position as a technological leader in its industry, 
maintaining the competitiveness of Ariel's current products and adding new      
features, functions and products. Ariel has, in the past, made and intends to   
continue to make, significant investments in product and technological          
development.                                                                    

  Ariel is focusing its development efforts on next generation voice plus data
network equipment using standards-based components. Ariel will continue to      
aggressively develop new capabilities to extend its PowerPOP architecture in    
such areas as handling combined voice and data applications, system management, 
performance, density and reduced product cost.                                  

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Ariel's research and development expenditures totaled $6.7 million, $5.7  
million and $5.3 million in 1998, 1999 and 2000, respectively. Ariel performed  
its research and product development activities at its facilities in Cranbury,  
New Jersey and Paris, France.                                                   

Manufacturing and Quality Control                                               

Substantially all of the manufacturing of Ariel's products is outsourced. 
The primary contract manufacturing companies Ariel uses are Reptron             
Manufacturing Services and JRE Inc. both located in the United States. This     
allows Ariel to focus its resources on product research and development,        
marketing and sales and customer support. Ariel's internal manufacturing        
operations consist primarily of production of prototypes, testing,              
manufacturing and test engineering, materials purchasing and inspection and     
quality control. Ariel monitors the performance and quality of the work         
performed by its outside contractors by using internal quality assurance        
procedures and by making regular visits to manufacturing facilities.            

Ensuring adequate and flexible production capacity, continuous cost       
reduction and superior product quality are top priorities of Ariel's            
manufacturing efforts. Ariel achieves its manufacturing goals by:               

. working closely with its contract manufacturers during the product design 
and build phases;                                                       

. effectively managing a limited number of the most qualified suppliers;    
and                                                                     

. constantly improving upon its product performance tests.                  

  Ariel's products are manufactured with components and subassemblies supplied
by subcontractors to Ariel's specifications. Ariel has purchased digital signal 
processing chips and certain other components from Texas Instruments, Lucent    
Technologies, Conexant, Motorola and Analog Devices, each of which manufactures 
and is the sole supplier of the digital signal processing chips upon which some 
of Ariel's products have been developed. Ariel purchased modems for its RS4200  
from Mapletree Networks. Although Ariel has not experienced any material        
difficulties in obtaining supplies or manufactured products, any reduction or   
interruption in supply or manufacturing from these third parties would          
adversely affect Ariel's ability to deliver products.                           

Sales and Marketing                                                             

Ariel markets its products principally to ISPs, CLECs and networking and  
communications OEMs. Ariel sells its products to ISPs through its direct sales  
force, value added resellers and distributors. Resellers and integrators        
custom-configure systems with components from Intel, IBM, Compaq, Ariel and     
others to ISP specifications and deliver directly to ISPs. This approach to     
delivering products is similar to the low-cost delivery models of the PC        
industry and ensures that the ISP can obtain its specific desired configuration 
at a competitive price.                                                         

Ariel also markets its products to OEM's in the United States and Europe  
primarily through a direct sales force and through independent sales            
representatives. Internationally, Ariel also sells its products through value   
added resellers and distributors in Europe, Israel and the Far East. Ariel      
maintains sales offices in Dortmund, Germany, and Paris, France.                

  Ariel's marketing communications activities have been outsourced to a number
of specialized outside agencies. Ariel obtains most new sales prospects through 
advertising, existing customers, strategic relationships and trade show         
participation. Ariel's principal marketing activities include display           
advertising in trade publications, direct mail, trade show participation and a  
home page on the web.                                                           

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Technical Support                                                               

Technical support is provided by application engineers or customer service
employees located at Ariel's headquarters. Ariel offers web, fax, pager,        
telephone and electronic mail support to assist its customers. ISPs are         
supported by Ariel's telephone support staff, a password protected section of   
Ariel's website, and, when required, by onsite visits.                          

OEMs support their own customers, however, Ariel's telephone support staff
provides support for OEMs during their development phase and, given that OEMs   
have substantial technical knowledge, they are often also supported directly by 
Ariel's engineering department. Development consultation support for OEM        
engineers in developing their products is provided on a for-fee basis.          

In addition to assisting OEM customers in their own development projects, 
Ariel also has processes and capabilities in place to perform custom            
engineering to provide OEMs with products that meet their precise requirements. 

  Ariel's products are covered by a 5-year limited warranty against defects in
manufacture. Product replacement is the most common mechanism used to resolve   
product defect issues. Ariel's support engineering staff has created an         
innovative "Spare In The Air" program to ensure the delivery of replacement     
products within 24 hours of a reported failure. Extended service contracts are  
also available.                                                                 

Customers                                                                       

Ariel markets its products to two groups of customers--small and mid-sized
ISPs in the United States and networking and communications OEMs worldwide.     
While the products Ariel sells to ISPs and OEMs are similar, OEMs generally     
incorporate Ariel's products into theirs before reselling to the end user. Some 
of Ariel's OEM customers include PSI Net, Motorola, Lockheed Martin, UT Starcom 
and AT&T. Two customers, PSI Net at 20% and Motorola at 11%, each represented   
greater than 10% of sales for the year ended December 31, 2000. Three customers 
together represented 45% of sales for the year ended December 31, 1999,         
including sales to Motorola, Transaction Network Services and Lockheed Martin,  
which represented 22%, 11% and 12% respectively. In Europe, Ariel sells its     
full range of products to telecommunications OEMs. In June 2000 Ariel           
discontinued sales of its line of ISDN terminal adapters (acquired with Scii    
Telecom S.A.). During 1998 three of Ariel's customers represented 52% of        
Ariel's sales. Sales to Compaq accounted for 25% of Ariel's total sales and     
sales to Cabletron and Transaction Network Systems represented 14% and 13%,     
respectively. As a result of the decline of the enterprise remote access market 
in late 1998, there have been no sales to Compaq since 1998.                    

Competition                                                                     

The markets for Ariel's products are intensely competitive, continually   
evolving and subject to changing technologies. Ariel competes principally on    
the basis of (1) the flexibility, scalability, quality, ease of use,            
reliability and cost effectiveness of its products and (2) its reputation and   
the depth of its expertise, customer service and support.                       

Ariel competes directly or indirectly with the following categories of    
companies: (1) other small companies that sell remote access server equipment,  
such as Interphase, Avail and Netaccess, (2) large, well-established companies  
that sell remote access server equipment such as Ascend/Lucent, Cisco, and      
3Com, (3) third party modem board manufacturers, such as Equinox and Digi       
International and (4) manufacturing departments within Ariel's OEM customers.   
Because the markets in which Ariel competes are rapidly evolving, additional    
competitors with significant market presence and financial resources, including 
large telecommunications equipment manufacturers and computer hardware and      
software companies, may enter these markets and further intensify competition.  

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Intellectual Property and Other Proprietary Rights                              

Ariel believes that its success is dependent, in part, on proprietary     
technology. Ariel seeks to maintain the proprietary nature of its technology by 
several methods, including:                                                     

. copyright, trade secret and trademark laws;                               

. confidentiality agreements with employees and third parties;              

. contractual provisions contained in license and other agreements with     
consultants, suppliers, strategic partners, resellers and end-user      
customers; and                                                          

. patents.                                                                  

 Substantially all of Ariel's hardware products contain security codes which
deter duplication by third parties. Ariel also asserts copyright in relation to 
certain aspects of its products and Ariel generally enters into confidentiality 
agreements with its employees and limit access to Ariel's proprietary           
information. Despite these precautions, it may be possible for unauthorized     
third parties to copy certain aspects of Ariel's products or to obtain          
information that Ariel regards as proprietary. Ariel has filed patent           
applications for patent protection covering some aspects of its next generation 
products. To date, these patents have not been granted, and Ariel cannot assure 
you that they will ever be granted. Ariel does not hold patents on any of its   
other products, and in the event competitors are able to create substantially   
similar or duplicate products, Ariel will not be able to avail itself of the    
protection afforded by the patent laws.                                         

  Ariel believes that due to the rapid pace of innovation within its industry,
factors such as the technological expertise of Ariel's personnel and ongoing    
reliable product maintenance and support are more important in establishing and 
maintaining a leadership position within the industry than the pursuit of       
various legal protections of its technology.                                    

 Ariel also depends upon development, supply, marketing, licensing and other
operative relationships with third parties for complementary technologies       
incorporated in Ariel's products. These cooperative relationships are with      
hardware and software developers pursuant to which both parties make their      
respective technology available to the other for the purpose of achieving       
compatible products. Some of these relationships are based upon annually        
renewable license agreements under which Ariel obtains technology necessary to  
produce its products. Although Ariel has no reason to believe that these        
mutually beneficial relationships will end, these relationships are generally   
non-exclusive and terminable, and Ariel cannot assure you that it will be able  
to maintain these relationships or to initiate additional similar               
relationships. The loss of certain cooperative relationships, particularly with 
any of the digital signal processing chip suppliers, may have a material        
adverse effect on Ariel's business.                                             

  Ariel BypaSS7 and PowerPOP are trademarks of Ariel. All other trademarks and
service marks appearing in this memorandum are trademarks or service marks of   
the respective companies that use them.                                         

Backlog                                                                         

Backlog shippable within a twelve-month period was approximately $0.9     
million at December 31, 2000. Backlog was $0.5 million at December 31, 1999 and 
approximately $2.1 million at December 31, 1998. As of March 31, 2001 backlog   
was approximately $0.9 million. Ariel's order trend is characterized by         
delivery cycles that range from several days to quantities deliverable over     
several months. Further, customers may revise scheduled delivery dates or       
cancel orders. Accordingly, the portion of sales in each fiscal quarter derived 
from backlog at the beginning of that quarter varies based on the customer's    
required delivery dates.                                                        

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Employees                                                                       

As of December 31, 2000, Ariel had 67 employees, including 6 employees in 
Europe and 2 part-time employees. As of March 31, 2001, Ariel had 68 employees, 
including 6 employees in Europe and 2 part-time employees. None of Ariel's      
employees are represented by a collective bargaining agreement nor has Ariel    
experienced any work stoppage. Ariel believes its relationship with its         
employees is satisfactory.                                                      

Properties                                                                      

Ariel maintains office and light assembly space comprising approximately  
30,000 square feet at 2540 Route 130, Cranbury, New Jersey pursuant to a lease, 
expiring January 2006. The annual rent is approximately $420,000. Ariel also    
maintains branch or subsidiary offices in Paris, France, and Dortmund, Germany. 

Legal Proceedings                                                               

 Ariel is not engaged in any material legal proceedings. Ariel may from time
to time become a party to various legal proceedings in the ordinary course of   
business.                                                                       

Directors and Executive Officers                                                

The following table sets forth Ariel's executive officers and directors as
of December 31, 2000. Ariel's board of directors currently consists of seven    
directors. Except as otherwise stated, executive officers serve at the          
discretion of the board of directors. The board of directors met 12 times in    
fiscal year 2000 and no director attended fewer than 75% of the board meetings. 

                                                                [Download Table]

          Name           Age Position                                       
          ----           --- --------                                       
                                                                            
Anthony M. Agnello......  51 Chairman of the Board of Directors             

Dennis I. Schneider.....  49 President, Chief Executive Officer and Director

John R. Loprete.........  40 Vice President--Finance                        

Carlos G. Borgialli.....  58 Vice President--Engineering                    

Esmond T. Goei..........  51 Vice Chairman of the Board of Directors        

Harold W. Paul..........  53 Director and Secretary                         

Robert F. Burlinson.....  61 Director                                       

Ira H. Fuchs............  52 Director                                       

Jay H. Atlas............  56 Director                                       

Anthony M. Agnello co-founded Ariel in 1982 and serves as Chairman of the 
board. He has been a member of the compensation committee since June 1995. He   
also held the title of President from 1988 until September 1996. In December    
1998, Mr. Agnello resigned as Chief Executive Officer simultaneously with the   
appointment of Mr. Atlas to that position. Mr. Agnello will continue as a       
director of the combined company after the merger.                              

Dennis I. Schneider was appointed President and Chief Executive Officer in
May 2000. Prior to that he was Senior Vice President of Marketing for Ariel     
since December 1998. Mr. Schneider was elected to the Board of Directors in     
June 2000. For more than five years, he was a marketing consultant to major     
corporations in the computer, networking and telecommunications industry        
including Chase Manhattan Bank, Andersen Consulting, IBM and Lucent             
Technologies. He has more than 25 years' experience in the industry, holding    
senior marketing and general management positions with Digital Equipment        
Corporation and as an officer of Motorola Inc. Upon consummation of the merger, 
he will be Senior Vice President of Marketing of the combined company.          

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John R. Loprete began working with Ariel in April 1998 and was appointed  
Vice President--Finance in January 1999. He is a Certified Public Accountant    
with over 15 years' experience in finance and accounting. His experience        
includes eleven years with Concurrent Computer Corporation, a Florida-based     
computer manufacturer.                                                          

Carlos G. Borgialli was appointed to the position of Vice President--     
Engineering in May 1999. Mr. Borgialli joined Ariel from Digital/Compaq, where  
he spent more than 20 years, leading and improving organizations in the design  
of client/server business-critical production systems. In his most recent       
position at Digital/Compaq, he served as Director of Engineering for the        
Network and Application Communication Products division. Prior to that, he was  
instrumental in developing and managing the development of a number of key      
telephony, videotext, and transaction processing products for Digital. Mr.      
Borgialli has also worked at the NASA Goddard Space Flight Center and spent     
five years at the Pan American Health Organization/World Health Organization.   

  Esmond T. Goei joined Ariel as Vice-Chairman of the board in August 1999. He
is a member of the audit and compensation committees. Prior to joining Ariel,   
he worked at Northern Telecom, where he last served as Director of the          
Corporate Venture Capital Division. Prior to that, he was Vice President of the 
Venture Capital Division at Toronto Dominion Bank and a Senior Systems          
Consultant at Touche Ross (now Deloitte & Touche). Mr. Goei co-founded MAYAN in 
October 1997, and has served as its Chairman of the Board of Directors since    
October 1997 and its Chief Executive Officer since March 2001 and will continue 
as Chairman and Chief Executive Officer of the combined company after the       
merger. Mr. Goei has served as the Chief Executive Officer, President and       
Chairman of the Board of Directors of XiMnet Corporation, a web services        
company, from April 1999 to March 2001 and has served as its Chairman of the    
Board of Directors since April 1999. From July 1994 to January 1999, Mr. Goei   
served as the Chief Executive Officer, President and Chairman of the Board of   
Directors of Nhancement Technologies, Inc., a communications systems            
integration company. Mr. Goei has a BS in Electrical Engineering from Queen's   
University at Kingston and an MBA from the University of Western Ontario.       

Harold W. Paul has been a director since June 1995 and was appointed      
secretary in March 1998. He is a member of the compensation committee. Mr. Paul 
has been a partner at Paul & Rosen LLP, a New York law firm specializing in     
securities matters. Since July 1999, he has been a director of Kirlin Holding   
Corp., a Nasdaq listed, Long Island based brokerage and investment banking      
company.                                                                        

 Robert F. Burlinson joined Ariel as a director in November 2000. Since July
2000 he has been a Director of Aztec Technology Partners, Inc. in Braintree,    
MA. From 1996 through 1998 he was Executive Vice President and Chief Financial  
Officer of Caribiner International, Inc. (NYSE). From 1996 through 1998 he was  
Vice President and Principal Financial Officer of Handy and Harman Inc. (NYSE). 

Ira H. Fuchs joined Ariel as a director in September 2000. Since July 2000
he has been Vice President for Research in Information Technology of the Andrew 
W. Mellon Foundation in Princeton, New Jersey. From 1985 to 2000, he was Vice   
President of Computing Information Technology at Princeton University.          

Jay H. Atlas served as Ariel's Chief Executive Officer and President from 
December 1998 through May 2000. He was appointed a director in January 1999.    
From 1995 to 1998, he served as the President and CEO of CTF Group, a           
management consulting firm. Since 1998, he has served as a trustee of the       
Kobrick Investment Trust, a group of mutual funds. He has more than 30 years'   
experience in the industry, including 20 years at Digital Equipment             
Corporation, in senior management positions in sales, service and marketing.    

Ariel's board of directors is composed of seven directors. The board is   
divided into three classes and the members of each class are elected at the     
annual stockholder meeting held in the year in which terms for that class       
expire. Messrs. Agnello and Paul have terms expiring in 2001. Messrs. Atlas and 
Goei have terms expiring in 2002. Messrs. Schneider, Fuchs and Burlinson have   
terms expiring 2003. The incumbent board nominates new directors.               

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Family Relationship                                                             

  There are no family relationships among any director or executive officer of
Ariel.                                                                          

Committees of Ariel's Board of Directors                                        

Compensation Committee. The compensation committee is responsible for     
reviewing Ariel's general compensation strategy; establishing salaries and      
reviewing benefit programs (including pensions) for the Chief Executive Officer 
and those persons who report directly to him; reviewing, approving,             
recommending and administering Ariel's stock option plans and other             
compensation plans; and approving employment contracts. The compensation        
committee met two times in the 2000 fiscal year. The current members of the     
compensation committee are Messrs. Goei, Agnello, and Paul.                     

Audit Committee. The audit committee's functions are to recommend the     
appointment of independent accountants; review the arrangements for, and scope  
of, the audit by Ariel's independent accountants; review the independence of    
Ariel's independent accountants; consider the adequacy of Ariel's system of     
internal accounting control and review any proposed corrective actions; review  
and monitor Ariel's policies relating to ethics and conflicts of interests;     
discuss with management and the independent accountants Ariel's draft annual    
financial statements and key accounting and/or reporting matters, including     
year 2000 issues; and review the activities and recommendations of Ariel's      
management audit department. The audit committee met three times during the     
2000 fiscal year. The current members of the audit committee are Messrs. Goei,  
Burlinson and Fuchs.                                                            

Compensation Committee Interlocks and Insider Participation                     

 The members of Ariel's compensation committee are Messrs. Agnello, Goei and
Paul. None of these current or former members is currently or has been an       
employee or officer of Ariel other than Mr. Agnello who was Chief Executive     
Officer of Ariel until December 1998. No member of the board of directors or    
the compensation committee serves as a member of the board of directors or      
compensation committee of any entity that has one or more executive officers    
serving as a member of Ariel's board of directors or compensation committee.    

 Mr. Agnello was paid $25,000 and $54,166 for management consulting services
rendered in the years ending December 31, 2000 and 1999, respectively. For the  
year ending December 31, 1998 Mr. Agnello received a bonus in the amount of     
$950,000 in connection with his role in the sale of Ariel's Communications      
Systems Group in November 1998. Effective June 30, 2000 Mr. Agnello became an   
employee of Ariel and through December 31, 2000 he had received compensation as 
an employee of $62,555.                                                         

Mr. Paul is a non-employee director who provides legal services for Ariel.
His firm received fees of approximately $113,000, $120,000 and $124,000, for    
the years ended December 31, 2000, 1999 and 1998, respectively.                 

Section 16(a) Beneficial Ownership Reporting Compliance                         

Section 16 (a) of the Securities and Exchange Act of 1934 requires Ariel's
directors and executive officers to file with the SEC initial reports of        
ownership and reports of changes in ownership of Ariel's common stock. Ariel    
believes that during the fiscal year ended December 31, 2000, its officers and  
directors complied with all these filings requirements. Ariel has relied upon   
the representations of its directors and executive officers. Ariel does not     
believe any other stockholders are subject to Section 16(a) filing              
requirements.                                                                   

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Executive Compensation                                                          

The following table summarizes the compensation earned over the last three
fiscal years by the Chief Executive Officer, four executive officers and one    
other individual who was not serving as an executive officer at year end, whose 
earned compensation exceeded $100,000 for the year ended December 31, 1999.     

                                                        [Enlarge/Download Table]

                            Annual Compensation               Long-Term Compensation       
                         ---------------------------   ------------------------------------
                                                                     Number of  All Other  
   Name and Principal                                  Other Annual   Options  Compensation
        Position         Year Salary ($)   Bonus ($)   Compensation*   (#)**        ($)*** 
   ------------------    ---- ----------   ---------   ------------- --------- ------------
                                                                                           
Dennis Schneider........ 2000  243,271      320,001        7,131                  13,218   
 President, CEO and      1999  200,000      120,000        5,119                  11,000   
  director                                                                                 
                         1998    7,692          --           --                      --    

Jay H. Atlas............ 2000  116,347(1)    57,292(2)    10,732        --       314,510(3)
 Former CEO and          1999  275,502      137,500        5,119        --        11,000   
  President                                                                                
 and Director            1998    5,288          --           --                      --    

Rich Flocco............. 2000  145,438       48,500(5)     7,131                  25,492   
 Vice President of                                                      --                 
  Operations             1999  134,879       12,000       12,924                 169,966(7)
                         1998  123,351        2,538       11,869                   8,973   

John Loprete............ 2000  129,616       40,000(6)     8,618                  15,152   
 Vice President of                                                      --                 
  Finance                1999  118,462       85,500       14,286                   1,798   
                         1998   84,213          --        10,462                     --    

Gene Corrado............ 2000   89,423       28,125        4,160                   2,228   
 Vice President of Sales 1999      --           --           --         --           --    
                         1998      --           --           --         --           --    

Carlos G. Borgialli..... 2000  170,000       42,750(4)    12,377                   8,668   
 Vice President of                                                                         
  Engineering            1999  113,333       20,000        8,912                   1,569   
                         1998      --           --           --         --           --    

--------                                                                        
(1) Mr. Atlas was President and Chief Executive Officer of Ariel until his      
employment was terminated on May 31, 2000.                              

(2) Includes $33,053 for bonuses paid in 2000 and accrued bonus of $24,239.     

(3) Includes $158,655 severance and $137,440 in consulting fees subsequent to   
   his termination. Mr. Atlas is entitled to $144,940 in severance benefits to
be paid out in 2001--this number is not included above.                 

(4) Includes $35,250 for bonuses paid in 2000 and accrued bonus of $7,500.      

(5) Includes $32,350 for MBO bonus paid in 2000 and accrued bonus of $16,250.   

(6) Includes $35,000 for MBO bonus paid in 2000 and accrued bonus of $5,000.    

(7) Includes $152,250 for options, $1,000 for auto allowance.                   

*   Represents contributions made by Ariel to Ariel's medical and life      
 insurance and long term disability/short term disability plans, and a
Company provided automobile.                                        

**  After giving effect to the one for     reverse stock split which is     
expected to occur immediately prior to the effective time of the    
merger.                                                             

*** Represents Ariel's contributions to Ariel's 401(k) plan, severance,     
exercising of options, consulting, auto allowance, payout of excess 
sick and vacation time, forgiveness of loan, and commission.        

Compensation Committee Report On Executive Compensation                         

  The following Report of the Compensation Committee and the performance graph
included elsewhere in this proxy statement do not constitute soliciting         
material and should not be deemed filed or incorporated by                      

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reference into any other Company filing under the Securities Act of 1933 or the 
Securities Exchange Act of 1934, except to the extent the Company specifically  
incorporates this Report or the performance graphs by reference therein.        

Report of Compensation Committee                                              

The Compensation Committee of the Board of Directors has furnished the    
following report on executive compensation for fiscal 2000.                     

What is the Company's philosophy of executive officer compensation? A base
salary, a performance-based annual bonus, and periodic grants of stock options. 

The Compensation Committee believes that this three-part approach best    
serves the interests of the Company and it's stockholders. It enables the       
Company to meet the requirements of the highly competitive environment in which 
the Company operates while ensuring that executive officers are compensated in  
a way that advances both the short and long-term interests of stockholders.     
Under this approach, compensation for these officers involves a high proportion 
of pay that is "at risk"--namely, the annual bonus and stock options. The       
annual bonus permits individual performance to be recognized on an annual       
basis, and is based, in significant part, on an evaluation of the contribution  
made by the officer to Company performance. Stock options relate a significant  
portion of long-term remuneration directly to stock price appreciation realized 
by all of the Company's stockholders.                                           

 Base Salary. Base salaries for the Company's executive officers, as well as
changes in such salaries, are based upon recommendations by the Chief Executive 
Officer, taking into account such factors as competitive industry salaries; a   
subjective assessment of the nature of the position; the contribution and       
experience of the officer, and the length of the officer's service.             

Annual Bonus. In May 2000, the Company entered into a new employment      
agreement with Mr. Schneider with performance based bonus provisions.           

Stock Option. Under the stock guidelines adopted by the Compensation      
Committee, stock option grants may be made to executive officers upon initial   
employment, upon promotion to a new, higher level position that entails         
increased responsibility and accountability and in connection with the          
execution of a new employment agreement. Options typically vest over a minimum  
four year period.                                                               

How is the Company's Chief Executive Officer compensated?                 

As Chief Executive Officer, Mr. Schneider is compensated pursuant to an   
employment agreement entered into in May 2000. The agreement, which extends     
through December 2001, subject to earlier termination under certain             
circumstances, provides for an annual base salary of $275,000. Mr. Schneider's  
bonuses for each fiscal year may be up to 50% of his base annual salary based   
upon performance related goals set by the Board of Directors. Additionally, he  
was granted options upon joining the Company and upon assuming the position of  
Chief Executive Officer, aggregating 486,000 options at various prices.         

It is the opinion of the committee that the aforementioned compensation   
structures provide features which properly align the company's executive        
compensation with corporate performance and the interests of it's stockholders  
and which offer competitive compensation relevant to comparable opportunities   
in the marketplace.                                                             

                           Respectfully submitted,
                               The Compensation Committee:

                      Anthony M. Agnello
                  Harold W. Paul
               Esmond Goei

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Directors' Compensation                                                         

  Current compensation plan. In August 1999, the board of directors approved a
new compensation plan for Ariel's non-employee directors. Each director is paid 
an annual amount of $6,000 for serving on the board. In addition, under the     
1996 directors stock option plan,      stock options, after giving effect to    
the one for     reverse stock split which is expected to occur immediately      
prior to the effective time of the merger, are granted to each director upon    
appointment to the board. The strike price for these options is the price of    
the common stock on the date of appointment. An additional      options, after  
giving effect to the one for     reverse stock split which is expected to occur 
immediately prior to the effective time of the merger, are granted for each     
subsequent year of service. Directors are also compensated in the amount of     
$1,000 for each meeting attended in person, and $500 for each meeting attended  
by telephone.                                                                   

 In September and November 2000, respectively, Ariel granted each of Messrs.
Fuchs and Burlinson      options, after giving effect to the one for            
reverse stock split which is expected to occur immediately prior to the         
effective time of the merger, when they joined the board.                       

Option Grants During the Year Ended December 31, 2000                           

The following table sets forth information regarding stock options granted
to the executive officers named in the summary executive compensation table.    
The table also shows a hypothetical potential realizable value of these options 
based upon assumed rates of an annual compounded stock price appreciation of 5% 
and 10% from the date the options were granted and over the full term. The      
assumed rates of growth were selected for illustrative purposes only, and are   
not intended to predict future stock prices which will depend upon market       
conditions and Ariel's future performance and prospects. Based upon the closing 
stock price and the number of common shares outstanding at the end of 2000, an  
assumed annual stock price appreciation of 10% would produce a corresponding    
aggregate pretax gain over the full option term of approximately $1.6 million   
for Ariel's common stockholders.                                                

                                                        [Enlarge/Download Table]

                                                                           Potential     
                                                                      Realizable Value at
                                                                            Assumed      
                                                                        Annual Rates of  
                                                                          Stock Price    
                                                                       Appreciation for  
                          Number of   Percent of                        Option Term at   
                          Securities    Total    Exercise               Public Offering  
                          Underlying   Options     Price                   Price ($)     
                           Options    Granted in Per Share Expiration -------------------
          Name           Granted (#)*    2000      ($)*       Date        5%       10%   
          ----           ------------ ---------- --------- ---------- --------- ---------
                                                                                         
Dennis I. Schneider(1)..                19.6%               5/19/10   1,838,208 2,927,038
Carlos G. Borgialli(1)..                 6.6%               4/18/10     539,571   859,177
John R. Loprete(1)......                 1.0%               4/18/10      93,152   148,330
Richard Flocco(1).......                 1.7%               4/18/10     155,254   247,216
Gene Corrado(1).........                 2.0%               5/22/10     149,655   238,300

--------                                                                        
*   After giving effect to the one for     reverse stock split which is       
  expected to occur immediately prior to the effective time of the merger.

(1)  Some options may vest at an accelerated rate if performance goals are      
achieved.                                                             

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Option Exercises During the Year Ended December 31, 2000 and Aggregate Fiscal   
Year-End Option Value                                                           

  The following table sets forth information concerning stock option exercises
by the executive officers named in the summary executive compensation table     
during 2000, including the aggregate value of gains on the date of exercise. In 
addition, this table includes the number of shares covered by both exercisable  
and non-exercisable stock options as of December 31, 2000. Also reported are    
the values for "in-the-money" options which represent the excess of the closing 
market price of the common stock at December 31, 2000 over the exercise price   
of the option.                                                                  

                                                        [Enlarge/Download Table]

                                                   # of Securities                               
                                               Underlying Unexercised     Value of Unexercised   
                          Number of            Options/SARs at Fiscal   In-the-Money Options/SARs
                           Shares                     Year End*            at Fiscal Year End    
                         Acquired on  Value   ------------------------- -------------------------
          Name            Exercise   Realized Exercisable Unexercisable Exercisable Unexercisable
          ----           ----------- -------- ----------- ------------- ----------- -------------
                                                                                                 
Dennis I. Schneider.....     -0-       -0-                                  -0-          -0-     
Jay H. Atlas............     -0-       -0-                     -0-          -0-          -0-     
Jack Loprete............     -0-       -0-                                  -0-          -0-     
Richard Flocco..........     -0-       -0-                                  -0-          -0-     
Gene Corrado............     -0-       -0-                                  -0-          -0-     
Carlos G. Borgialli.....     -0-       -0-                                  -0-          -0-     

--------                                                                        
*  After giving effect to the one for     reverse stock split which is expected 
to occur immediately prior to the effective time of the merger.           

Employment Agreements                                                           

Dennis I. Schneider, Ariel's Chief Executive Officer, is employed under an
employment agreement effective May 31, 2000 for a term ending December 31,      
2001, pursuant to which he is paid a base salary of $275,000. He is eligible    
for a bonus of up to an additional $137,500 based on the achievement if goals   
set annually by the Board of Directors. Upon execution of the agreement, Mr.    
Schneider was granted an additional       stock options at $    per share,      
after giving effect to the one for     reverse stock split,       of which were 
vested as of December 31, 2000. The balance will vest at December 31, 2001, or  
sooner based upon performance goals.                                            

Carlos G. Borgialli, Ariel's Vice President of Engineering, is employed   
under a three-year employment agreement effective May 4, 1999 pursuant to which 
he is paid a base salary of $170,000, subject to annual review, and is eligible 
for an incentive bonus of up to $30,000 based upon the attainment of certain    
goals. Mr. Borgialli was also granted      common stock purchase options, after 
giving effect to the one for     reverse stock split, pursuant to his           
employment agreement.                                                           

  Anthony M. Agnello, Ariel's Chairman, resigned as Chief Executive Officer in
December 1999 upon the appointment of Jay Atlas as Ariel's Chief Executive      
Officer and President. Mr. Agnello's employment agreement provided for an       
annual salary of $200,000 and bonus to be determined annually at the discretion 
of the board. Upon his resignation as Chief Executive Officer, Mr. Agnello      
entered into a two-year consulting agreement pursuant to which he is paid       
$50,000 per year. Mr. Agnello resigned as Chief Executive Officer effective     
upon Mr. Atlas' appointment as Chief Executive Officer in December 1998. Ariel  
entered into an agreement with Mr. Agnello in December 1998 providing for a one 
time severance payment of $600,000 in March 1999 and the issuance of            
common stock purchase options at $      per share, after giving effect to the   
one for     reverse stock split. His non-competition and non-solicitation       
agreements have been extended through December 2001.                            

Richard W. Flocco has a Severance Agreement with Ariel with an effective  
date of January 5, 2001. This severance agreement provides that if Mr. Flocco's 
employment at Ariel is terminated as a result of the                            

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elimination of his position due to a "change in control" and such termination   
was not for cause, he is entitled to receive certain severance benefits, which  
include six months of his salary and immediate vesting of any outstanding stock 
options that he holds. A "change in control" is defined in this severance       
agreement as occurring upon purchase of Ariel's common stock in a tender or     
exchange offer, an approval by the stockholders of a merger, consolidation,     
reorganization, liquidation, dissolution or sale of all or substantially all of 
Ariel's assets, or upon a change in the Chief Executive Officer of Ariel or Mr. 
Flocco's immediate supervisor.                                                  

  Mr. Gene M. Corrado has no employment agreement though he has entered into a
Non-disclosure, Noncompetition and Non-solicitation agreement pursuant to which 
while employed by Ariel and for specified periods of time after termination, he 
has agreed that he will not disclose any of Ariel's confidential information or 
trade secrets, solicit any of Ariel's customers or employees or compete with    
Ariel.                                                                          

Severance Packages. Messrs. Schneider, Borgialli and Agnello have executed
non-competition and non-solicitation agreements and are subject to non-         
competition and non-solicitation provisions in their employment agreements      
pursuant to which for a specified period following the termination of their     
employment, they have agreed not to solicit any of Ariel's customers or         
employees or to become associated with any of Ariel's competitors.              

Pursuant to Mr. Schneider's employment agreement, Ariel has the right to  
terminate his employment for "cause" or as a result of the employee's           
disability. Upon the early termination of his employment agreement, by Ariel    
without cause or by Mr. Schneider for "good reason", Mr. Schneider is entitled  
to receive one year of his annual salary and one year of benefits, and a pro    
rata portion of his bonus (which cannot be less than 25% of the bonus that      
Ariel granted him during the previous fiscal year), payable within six months   
of termination. In addition, in the event of a change in control, Mr. Schneider 
is entitled to accelerated vesting of options. A "change in control" includes   
an acquisition of 15% or more of Ariel's voting securities by any person,       
changes in the composition of the board of directors, or an approval by the     
stockholders of a merger, consolidation, reorganization, liquidation,           
dissolution or sale of all or substantially all of Ariel's assets.              

Jay Atlas served as Ariel's Chief Executive Officer from December 1998    
through May 2000, at which time he and Ariel mutually agreed to terminate the   
employment relationship and enter into a separation agreement on May 18, 2000.  
That agreement provided that Mr. Atlas would be paid severance in accordance    
with the provisions of his employment agreement of December 21, 1998 of one     
years salary, a pro rata portion of his earned bonus and other pre-termination  
benefits. Mr. Atlas continues as a Director of Ariel through his elected term.  
The agreement became effective on May 31, 2000 at which time Mr. Atlas resigned 
and Mr. Schneider assumed the position of Chief Executive Officer.              

Pursuant to Mr. Borgialli's employment agreement, Ariel has the right to  
terminate his employment for "cause" or as a result of the employee's           
disability. Upon the early termination of his employment agreement, by Ariel    
without cause or by Mr. Borgialli for "good reason" or due to a change in       
control, Mr. Borgialli is entitled to receive one-half of his annual salary     
payable within six months of termination. In addition, in the event of a change 
in control, Mr. Borgialli is entitled to accelerated vesting of options. A      
"change in control" includes an acquisition of 15% or more of Ariel's voting    
securities by any person, changes in the composition of the board of directors, 
or an approval by the stockholders of a merger, consolidation, reorganization,  
liquidation, dissolution or sale of all or substantially all of Ariel's assets. 

 John R. Loprete has a Severance Agreement with Ariel with an effective date
of December 1, 2000. This severance agreement provides that if Mr. Loprete's    
employment at Ariel is terminated as a result of the elimination of his         
position due to a "change in control" and such termination was not for cause,   
he is entitled to receive certain severance benefits, which include six months  
of his salary and immediate vesting of any outstanding stock options that he    
holds. A "change in control" is defined in this severance agreement as          
occurring upon purchase of Ariel's common stock in a tender or exchange offer,  
an approval by the stockholders of a merger, consolidation, reorganization,     
liquidation, dissolution or sale of all or substantially all                    

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of Ariel's assets, or upon a change in the Chief Executive Officer of Ariel or  
Mr. Loprete's immediate supervisor.                                             

  As part of the merger, it is expected that Mr. Schneider, Mr. Borgialli, Mr.
Loprete, Mr. Flocco and Mr. Corrado will enter into new employment agreements   
with the combined company, to be effective at the time the merger is            
consummated, pursuant to which the employees commit to working for a minimum of 
two years after the effective time of the merger, however, the combined company 
can terminate the employees' employment for any reason at any time. At the      
expiration of this two year term, the employment contracts will automatically   
renew for additional one year periods, unless either parties gives notice       
otherwise. If the employees are terminated without cause within the initial     
two-year term, the employee will be entitled to a maximum of six months of      
their salary as severance pay and accelerated vesting of certain options, and   
if terminated without cause after the initial two-year term, the employee will  
be entitled to a maximum of three months salary as severance pay and            
accelerated vesting of options. The agreement contemplates repricing the        
employee's options if the combined company adopts such a plan. The employees    
also agree to waive certain accelerated vesting rights they have with respect   
to their options and agree to a new vesting schedule for options that are       
unvested at closing. This agreement places a non-compete prohibition on         
employees for one year after their termination of employment. Mr. Schneider's   
agreement also calls for the company to pay his commuting expenses from New     
Hampshire and for a bonus of up to 50% of his base salary upon the achievement  
of certain goals and objectives.                                                

The 1992 Stock Option and Restricted Stock Plan                                 

During 1992, the board of directors approved, and Ariel's stockholders    
ratified, the adoption of the 1992 stock option and restricted stock plan. The  
plan provided for a maximum of        shares of Ariel's common stock, after     
giving effect to the one for     reverse stock split which is expected to occur 
immediately prior to the effective time of the merger, to be issued to          
employees, directors and consultants in connection with stock option grants or  
restricted stock awards.                                                        

During 1994, Ariel granted a total of        options under the plan, after
giving effect to the one for     reverse stock split, entitling the holders to  
acquire an equal number of shares of Ariel's common stock at an exercise price  
per share of $     or $    . The options vest over a four-year period.          

 Effective October 31, 1994, the board terminated the plan and, accordingly,
no additional options or awards will be issued under the plan. At December 31,  
2000,       options remain outstanding, after giving effect to the one for      
reverse stock split.                                                            

The 1994 Stock Option Plan                                                      

  In 1994, the board of directors approved, and Ariel's stockholders ratified,
the adoption of the 1994 stock option plan. The plan provides for a maximum of  
  shares of Ariel's common stock, after giving effect to the one for
reverse stock split which is expected to occur immediately prior to the         
effective time of the merger, to be issued to employees, directors and          
consultants in connection with stock option grants. Stock options are granted   
by the board or a committee appointed by the board. Each stock option entitles  
the holder to acquire an equal number of shares of common stock at an exercise  
price equal to the fair market value of the common stock on the date of grant   
as determined by the board and 110% of the fair market value for an employee    
who owns 10% or more of Ariel's common stock. The board will determine the      
stock option vesting period and expiration date not to exceed ten years from    
the date the stock options were granted. At the discretion of the board, Ariel  
may make loans to employees in order to enable them to exercise their stock     
options. The plan also provides for the board, at its discretion, to accelerate 
the vesting of all outstanding stock options so that they become fully and      
immediately exercisable.                                                        

During October 1994, Ariel granted         stock options from the plan to 
three members of Ariel's advisory board. Each stock option entitles the holder  
to acquire one share of Ariel's common stock at exercise                        

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prices, per share, of $      for         stock options and $       for the      
remaining        , after giving effect to the one for     reverse stock split   
which is expected to occur immediately prior to the effective time of the       
merger. All stock options are immediately exercisable and expire three years    
from the date of grant. Since Ariel's initial public offering in January 1995   
and pursuant to the underwriting agreement Ariel entered into at the time, no   
options can be granted under the 1994 plan at an exercise price of less than    
$4.00.                                                                          

 All outstanding options vest over periods ranging from immediate vesting to
four years and have ten-year terms. At December 31, 2000,         options       
remain outstanding, after giving effect to the one for     reverse stock split. 

1995 Stock Option Plan                                                          

 In 1995, the board of directors adopted Ariel's 1995 incentive stock option
plan, which was approved by Ariel's stockholders at the annual meeting of       
stockholders on May 14, 1996. The stockholders ratified an amendment to the     
plan at the annual meeting of stockholders held on June 23, 1999, increasing    
the number of shares issuable under the plan from         to        , after     
giving effect to the one for     reverse stock split.                           

The board believes that the plan is desirable to attract and retain       
executives and other key employees of outstanding ability. Under the plan,      
options to purchase a maximum aggregate of         shares of Ariel's common     
stock, after giving effect to the one for     reverse stock split, may be       
granted.                                                                        

  During 2000, Ariel granted a total of           options, after giving effect
to the one for     reverse stock split, entitling the holder to acquire an      
equal number of shares of Ariel's common stock at exercise prices ranging from  
$     to $   . The options vest over periods ranging from immediate vesting to  
four years and have ten-year terms. At December 31, 2000,        options remain 
outstanding, after giving effect to the one for     reverse stock split.        

The plan is administered by the board of directors, which may delegate its
powers to a committee of directors. The board is generally empowered to         
interpret the plan, prescribe rules and regulations relating thereto, determine 
the terms of the option agreements, amend them with the consent of the          
optionee, determine the employees to whom options are granted and determine the 
number of shares subject to each option and the applicable exercise price. Upon 
exercise of an option, the optionee may pay the exercise price with previously  
acquired securities of Ariel, or at the discretion of the board, Ariel may loan 
a portion or all of the purchase price to the optionee.                         

 Options are exercisable for a term determined by the board, which cannot be
greater than ten years from the date of grant. Options may be exercised only as 
long as the original grantee maintains a relationship with Ariel which confers  
eligibility to be granted options, or within three months after termination of  
a relationship with Ariel, or for up to one year following death or total and   
permanent disability. In the event of the termination of the relationship       
between Ariel and the original grantee for cause, all options granted to that   
original optionee terminate immediately. In the event of certain changes        
affecting Ariel, including a change in control, and in the discretion of the    
board, each option may become fully and immediately exercisable. Incentive      
stock options are not transferable other than by will or the laws of descent    
and distribution. Non-qualified stock options may be transferred to the         
optionee's spouse or lineal descendants, subject to certain restrictions.       
Options may be exercised during the holder's lifetime only by the holder or his 
or her guardian or legal representative.                                        

Options granted pursuant to the plan may be designated as incentive stock 
options, with the attendant tax benefits provided under Sections 421 and 422 of 
the Internal Revenue Code of 1986. Accordingly, the plan initially provided     
that the aggregate fair market value (determined at the time an incentive stock 
option is granted) of the common stock subject to incentive stock options       
exercisable for the first time by an employee during any calendar year (under   
all of Ariel's plans or those of any of Ariel's subsidiaries) may not exceed    

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$100,000. The board may modify, suspend or terminate the plan; provided,        
however, that material modifications affecting, and any changes in, the plan    
must be approved by the stockholders. Any change in the plan that may adversely 
affect an optionee's rights under an option previously granted under the plan   
requires the consent of the optionee.                                           

Non-Plan Options                                                                

During 2000, Ariel granted          stock options, after giving effect to 
the one for     reverse stock split, to employees and outside consultants. The  
options were issued outside the 1995 plan and entitle the holders to acquire an 
equal number of shares of Ariel's common stock at exercise prices ranging from  
$     to $    , after giving effect to the one for     reverse stock split. The 
options vest over periods ranging from immediate vesting to four years and have 
ten-year terms. At December 31, 2000, a total of         non-plan options       
remain outstanding, after giving effect to the one for     reverse stock split  
which is expected to occur immediately prior to the effective time of the       
merger.                                                                         

1996 Directors Plan                                                             

  The 1996 directors plan was adopted by the board of directors on January 24,
1996 and approved by the stockholders at the annual meeting of stockholders     
held on May 14, 1996. This plan provides for the issuance of up to        stock 
options, after giving effect to the one for     reverse stock split, to non-    
employee directors. At the annual meeting of stockholders held on June 24,      
1998, the stockholders ratified an amendment to the plan increasing the number  
of issuable shares to       , after giving effect to the one for     reverse    
stock split. The plan is administered by a committee appointed by the board of  
directors and is effective for a period of ten years from the date it was       
adopted. The plan is not subject to any provisions of the Employee Retirement   
Income Security Act of 1974.                                                    

At March 31, 2001,         options remain outstanding pursuant to the 1996
directors plan, after giving effect to the one for     reverse stock split. The 
ability of a grantee to purchase the common stock under the 1996 directors plan 
is terminated if his or her service is terminated, provided that in certain     
circumstances the grantee or his estate will have the right to purchase the     
common stock after termination of service for a limited period of time. The     
right to acquire common stock is not transferable except in the event of death  
of the grantee. In the event that a reorganization, merger, consolidation,      
reclassification, recapitalization or capital adjustment including a stock      
dividend or other similar change in Ariel's common stock, the committee will    
adjust the number and kind of shares that may be acquired under the 1996        
directors plan. Common stock that may be acquired under the 1996 directors plan 
may be acquired by the surrender of other shares of common stock owned by a     
director or the surrender of an unexercised portion of the right to acquire     
common stock under the 1996 directors plan.                                     

Report on Repricing of Stock Options                                            

Stock options were granted under the 1994 and 1995 stock option plans to  
many of Ariel's employees from June 1995 through July 1998 with exercise prices 
ranging from $     to $     per share, after giving effect to the one for       
reverse stock split. Subsequent to these grants the market price of Ariel's     
common stock suffered a significant decline. In order to ensure that the        
options previously granted would provide a meaningful incentive to motivate and 
retain employees, employees were given the opportunity to cancel those options  
and receive in exchange a like number of options granted as of November 15,     
1998 with an exercise price of $    , after giving effect to the one for        
reverse stock split, providing for a newly commenced vesting period as of the   
repricing date.                                                                 

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Security Ownership of Certain Beneficial Owners and Management                  

  The following table sets forth information regarding beneficial ownership of
Ariel's common stock as of March 31, 2001 by: (i) each stockholder known by     
Ariel to be the beneficial owner of 5% or more of the outstanding common stock, 
(ii) each director and executive officer of Ariel individually, and (iii) all   
directors and executive officers as a group. Except as otherwise indicated in   
the footnotes below, Ariel believes that each of the beneficial owners of the   
common stock listed in the table, based on information furnished by that owner, 
has sole investment and voting power with respect to those shares.              

Ariel is not aware of any individual or group of individuals that is the  
beneficial owner of more than 5% of its common stock, other than Mr. Agnello,   
Ariel's Chairman and former Chief Executive Officer. Unless otherwise           
specified, the address of the principal stockholders is to Ariel Corporation,   
2540 Route 130, Cranbury, NJ 08512.                                             

                                                                [Download Table]

                                                     Number of             
                                                       Shares              
                                                    Beneficially           
Directors and Executive Officers                      Owned**    Percentage
--------------------------------                    ------------ ----------
                                                                           
Anthony M. Agnello................................        (1)        5.6%  
Dennis I. Schneider...............................        (2)        2.5%  
Esmond T. Goei....................................        (3)         *    
Ira H. Fuchs......................................        (3)         *    
Harold W. Paul....................................        (4)         *    
Robert F. Burlinson...............................        (3)         *    
Jay H. Atlas......................................        (5)        1.8%  
Carlos G. Borgialli...............................        (5)         *    
John R. Loprete...................................        (6)         *    
Gene Corrado......................................        (5)         *    
Richard Flocco....................................        (7)         *    
All officers and directors as a group (eleven                              
 people)..........................................                  12.6%  

--------                                                                        
*    Less than l%.                                                              

**   After giving effect to the one for     reverse stock split which is        
  expected to occur immediately prior to the effective time of the merger.

(1)  Includes      shares, subject to presently exercisable options.            

(2)  Includes       shares, subject to presently exercisable options.           

(3)  All shares beneficially owned by Messrs. Goei, Burlinson and Fuchs reflect 
options issued in exchange for their services as directors.           

(4)  All shares shown are subject to presently exercisable options.             

(5)  All shares shown are subject to presently exercisable options.             

(6)  Includes       shares, subject to presently exercisable options.           

(7)  Includes        shares, subject to presently exercisable options.          

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Certain Relationships and Related Transactions                                  

  In June 1998, Ariel entered into an agreement to sell Ariel's Communications
Systems Group to Cabletron Systems for approximately $33,500,000 net of amounts 
paid to engineers and other members of the group which were paid directly to    
them by Cabletron. As part of the transaction, Ariel paid bonuses to three      
directors who played an integral role in the transaction. These bonuses         
included $950,000 to Mr. Agnello, $140,000 to Theodore Coburn and $75,000 to    
Robert Ranalli, a director until September 1999. In addition, Ariel paid        
Etienne Perold a fee of $1,541,673 for his consulting services in the           
transaction. Mr. Perold was a director at the time he performed these services. 

Mr. Agnello, Ariel's chairman, entered into a consulting agreement with   
Ariel in January 1999 to provide management advisory services. Pursuant to that 
agreement Mr. Agnello was paid $54,166 for those services for the year ended    
December 31, 1999 and $25,000 for the year ended December 31, 2000.             

Paul & Rosen LLP, a law firm of which Mr. Paul, also one of Ariel's       
directors, is a partner, received fees of approximately $113,000, $120,000 and  
$124,000 for the years ended December 31, 2000, 1999 and 1998, respectively.    
These fees were for legal services which it performed on Ariel's behalf.        

Mr. Perold, who was a director until the 1999 annual stockholders meeting,
has provided Ariel management advisory services. Fees incurred for the year     
ended December 31, 1998, 1997 and 1996 were approximately $450,000, $218,000    
and $208,000, respectively, and $104,000 for the six months ended June 30,      
1998. No fees were incurred for the six months ended June 30, 1999. In          
addition, in December 1998, Mr. Perold received       immediately exercisable   
stock options, after giving effect to the one for    reverse stock split, for   
his management advisory services. Mr. Perold had an outstanding loan of         
$100,000 owed to Ariel as of December 31,1998, which was repaid in full in      
January 1999.                                                                   

Brown, Coburn & Co., of which Mr. Coburn, one of Ariel's directors until  
September 1999, is a co-founder and principal, received fees of $156,200,       
$88,000 and $23,000 for the years ended December 31, 1998, 1997 and 1996,       
respectively, and $40,211 and $60,701 for the six months ended June 30, 1999    
and 1998, respectively, in connection with investment banking advisory          
services. In addition,      stock options, after giving effect to the one for   
reverse stock split, previously granted to Mr. Coburn for investment    
banking advisory services,       in each of July 1996 and May 1997, vested      
during 1998.                                                                    

In February 1999, Ariel entered into a consulting agreement with GIOS     
Incorporated to advise Ariel's senior management in connection with the         
installation of new product development process capabilities, including         
assessing process issues and providing strategic decision support. GIOS was co- 
founded in September 1998 by Dennis Schneider, Ariel's Senior Vice President--  
Marketing. The agreement provides that Mr. Schneider will represent only        
Ariel's interests during the course of the consulting relationship.             
Compensation to GIOS under the agreement is $2,000 per day, three days per week 
for the first month of the agreement, and $1,750 per day for the remainder of   
the relationship, with specific time commitments to be negotiated by the        
parties. At December 31, 1999, Ariel had paid approximately $106,000 to GIOS    
for consulting services.                                                        

Sales Consulting Services                                                       

 Mr. Atlas, a director and former executive officer of Ariel, entered into a
consulting relationship with Ariel in June 2000 to provide sales consulting     
services. Fees received for those services for the year ended December 31, 2000 
were approximately $137,000.                                                    

Ariel believes that the transactions described above were on terms no less
favorable than could have been obtained from unaffiliated third parties.        

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ARIEL

The discussion and analysis below should be read in conjunction with the  
Financial Statements of Ariel and the accompanying notes set forth on pages F-1 
through F-33.                                                                   

Overview                                                                        

  Ariel is a provider of open systems-based digital remote access equipment to
ISPs. Ariel's remote access equipment is compatible with open systems platforms 
running a variety of popular operating systems, including Windows NT and Linux, 
and enables ISPs to build reliable, scalable and easy to manage networks at a   
cost that is significantly below other available alternatives.                  

Historically, Ariel's core strength has been supplying digital signal     
processing-based (DSP) sub-systems to OEMs and government contractors. Ariel's  
DSP OEM products are incorporated into a variety of applications, including     
medical instrumentation, machine vision, professional audio, sonar, radar and   
multimedia.                                                                     

  In 1996, Ariel formed a communications systems group to begin development of
an Asymmetrical Digital Subscriber Line ("ADSL") carrier-class product          
targeting the needs of major telecommunications and network service providers.  
As a result of Ariel's strategic decision to reposition itself in 1997, Ariel   
decided to sell its communications systems group, and in September 1998 Ariel   
completed the sale of the group's assets to Cabletron Systems, Inc. for         
approximately $30 million.                                                      

In 1997, Ariel also announced its intention to focus on the remote access 
equipment market through product offerings that provide high density and cost-  
effective remote access solutions based on industry standard PC platforms.      
Ariel developed the T1 Modem and Tl Modem Plus products, Windows NT-based       
remote access solutions, for this market. Target customers for these products   
were OEMs that wanted to integrate remote access capability into their          
computers. A major PC manufacturer, Compaq, adopted the Tl Modem Plus remote    
access solution in March 1998.                                                  

 By late 1998, widespread use of the Internet and improved Internet security
led enterprises to outsource their remote access needs to ISPs. This led to the 
decline of Compaq's primary remote access market, the enterprise remote access  
market, and Ariel's revenues from Compaq decreased from a total of $4.4 million 
in 1998 to zero for the periods ended December 31, 2000 and December 31, 1999.  

Ariel's ability to successfully execute its new business strategy is      
critical to the future performance of its business. During the second quarter   
of 1999 Ariel changed its business strategy to focus on the ISP market          
following the decline of the enterprise remote access market and Ariel          
continued to focus on ISPs through 2000. Historically, Ariel has derived        
substantially all of its revenues from product sales to OEMs and PC             
manufacturers. As Ariel focuses its efforts on the ISP market, Ariel expects    
sales to OEMs to represent a declining percentage of its total revenue in the   
future if Ariel's business strategy is successful. Because the ISP market is a  
new market for Ariel, and the equipment Ariel has developed for that market has 
only recently been introduced, Ariel has limited experience in selling its      
products. Currently, only a limited number of ISPs have purchased Ariel's       
product.                                                                        

 To expand Ariel's international operations, in November 1998 Ariel acquired
all of the outstanding common stock of Solutions for Communications and         
International ISDN, S.A. (Scii) headquartered in Paris, France. The transaction 
was accounted for using the purchase method of accounting and consideration,    
including related transaction costs, consisted of $3,389,029 in cash.           

Revenue is derived from the sale of hardware and software products for DSP
and remote access applications. Ariel's customers consist primarily of OEMs,    
computer equipment distributors and ISPs. Ariel recognizes revenue at the time  
the product is shipped to the customer when there is no additional significant  
post-contract customer support obligation.                                      

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Results of Operations                                                           

  The following table sets forth statements of operations data as a percentage
of sales for the periods indicated.                                             

                                                                [Download Table]

                                                               Three Months   
                                                                Ended March   
                              Year Ended December 31,               31,       
                          -----------------------------------  -------------- 
                          1996   1997   1998    1999    2000    2000    2001  
                          -----  -----  -----  ------  ------  ------  ------ 
                                                                              
Sales.................... 100.0% 100.0% 100.0%  100.0%  100.0%  100.0%  100.0%
Cost of goods sold.......  49.7   54.4   68.6    43.8    56.2    41.9    70.9 
                          -----  -----  -----  ------  ------  ------  ------ 
    Gross profit.........  50.3   45.6   31.4    56.2    43.8    58.1    29.1 
Operating Expenses:                                                           
  Selling and marketing..  30.3   33.3   30.2    48.5    71.0    61.1   120.8 
  General and                                                                 
   administrative........  49.0   46.5   55.7    62.9    78.3    70.9   219.5 
  Research and                                                                
   development...........  44.2   62.0   38.5    48.9    66.5    61.8   123.7 
  Restructuring charge...   0.0    2.9    0.0     3.2    29.4     0.0     0.0 
                          -----  -----  -----  ------  ------  ------  ------ 
    Total operating                                                           
     expenses............ 123.5  144.7  124.4   163.5   245.2   193.8   464.0 
Loss from operations..... (73.3) (99.1) (93.0) (107.3) (201.4) (135.7) (434.9)
Gain on sale of assets...   0.0    0.0  169.3     0.0     0.0     0.0     0.0 
Total other income                                                            
 (expense)...............   5.7    2.5   (5.0)   (0.2)    0.7      *     (1.7)
Income/(loss) before                                                          
 income taxes............ (67.5) (96.7)  71.3  (107.5) (200.7) (135.7) (436.6)
Income tax expense                                                            
 (benefit)...............   0.0    0.0    2.1     0.0    (5.3)    0.0     0.0 
Net income/(loss)........ (67.5) (96.7)  69.2  (107.5) (195.4) (135.7) (436.6)

--------                                                                        
*  Less than 0.1%                                                               

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999           

Worldwide sales were $8,007,074 for the year ended December 31, 2000, a   
decrease of $3,619,472 compared to net sales of $11,626,546 for the year ended  
December 31, 1999. Domestic sales were $7,075,431 for the year ended December   
31, 2000 compared to $10,459,550 for the year ended December 31, 1999. In 1998  
Ariel began a shift from digital signal processing (DSP) to products and        
markets for dial-up remote access equipment (RAS). Initially Ariel pursued the  
RAS market though sales to manufacturers that focused primarily on selling      
remote access equipment to business enterprises. During 1999 Ariel shifted its  
sales and marketing efforts to focus mostly on Internet service providers       
(ISPs) who account for an increasing amount of RAS equipment purchases. The     
domestic sales decrease of $3,384,119 was due to reduced demand for Ariel's DSP 
products from original equipment manufacturers (OEMs) resulting from this       
shift. Those decreases were partially offset by sales of Ariel's RAS products   
to ISPs. International sales were $931,643 for the year ended December 31, 2000 
including U.S. exports of $489,354 and sales from European operations of        
$442,289 as compared to $1,166,996 for the same period of 1999. The decrease of 
$235,353 over prior year reflects an increase of US exports of RAS products,    
offset by a decrease in sales of BRI products at international subsidiaries.    

Gross profit decreased by $3,021,262 to $3,509,270 for the year ended     
December 31, 2000 from $6,530,532 for the year ended December 31, 1999. Gross   
profit was reduced by approximately $1,500,000 for additional inventory         
reserves recorded during the period. Ariel introduced the RS4200 in the fall of 
1999, which has improved price and performance over the RS2000. The RS4200      
began shipping in March of 2000. As a result, on hand quantities of the RS2000  
are in excess of future demand and reserves to write off approximately          
$1,100,000 of excess RS2000 inventory have been recorded through the year ended 
December 31, 2000. The remaining value of RS2000's in inventory is              
approximately $200,000 at December 31, 2000. Ariel will continue to review      
expected demand and adjust the carrying value of inventory as necessary.        
Additionally, certain older DSP products are expected to be in excess of future 
demand and reserves of $400,000 were recorded during the year ended December    
31, 2000 to write-off excess material. The decrease in                          

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gross profit percentage was also impacted by certain fixed manufacturing        
overhead costs on reduced sales volume for the period. The decrease was         
partially offset by the shipment of approximately $634,000 in products during   
the period, which had been previously written down, resulting in higher margins 
on those products for the current period. Gross profit percent for the year     
ended December 31, 2000 was 54.6% before giving effect to these write downs and 
sale of products previously reserved.                                           

  Sales and marketing expenses were $5,683,349 for the year ended December 31,
2000 compared to $5,634,070 for the year ended December 31,1999. The increase   
of $49,279 includes a decrease in sales commission of approximately $274,000    
due to lower revenues as well as a reduction in wages and recruiting costs of   
approximately $249,000 resulting from a restructuring of the sales organization 
completed in August of 1999. Those decreases were partially offset by increases 
in public relations and investor relations of approximately $566,000.           

General and administrative expenses were $6,277,270 for the year ended    
December 31, 2000 compared to $7,312,680 for the year ended December 31, 1999.  
The decrease of $1,035,409 reflects a reduction in amortization expense of      
approximately $447,000 for the year ended December 31, 2000 as compared to the  
year ago period. Those decreases were due to the write-down of goodwill related 
to Ariel's French subsidiary, taken in the second quarter of 2000.              
Additionally, reserves for un-collectible accounts decreased by $177,000 year   
over year and cost incurred for recruiting and investor relations were          
approximately $144,000 and $188,000 less, respectively, for the year ended      
December 31, 2000 versus the same period last year. During fiscal year 2000,    
Ariel further reduced costs related to its European operations, which           
contributed approximately $339,000 to the overall decrease in general and       
administrative expenses over the prior year period. Those decreases were        
partially offset by approximately $156,000 related to the amortization of non-  
cash financing cost; $45,000 in expenses related to the closing of Ariel's San  
Diego office and, $55,000 of additional rental charges related to Ariel's       
corporate headquarters in Cranbury, New Jersey.                                 

Research and development expenses were $5,321,127 for the year ended      
December 31, 2000 compared to $5,688,414 for the year ended December 31, 1999.  
The decrease of $367,287 is comprised primarily of decreases in salaries and    
related expenses of $469,000, as well as a reduction in cost for recruiting of  
approximately $54,000. Those decreases were offset by increases in research and 
development consultants of approximately $208,000.                              

  During fiscal year 2000, Ariel further reduced costs related to its European
operations, which contributed approximately $263,000 to the overall decrease in 
research and development expenses over the prior year period. Those decreases   
were offset by increases in depreciation and maintenance of approximately       
$103,000 for test lab equipment acquired in October 1999, as well as labor and  
material costs of approximately $380,000 for engineers related to development   
of Linux related software and Ariel's SS7 Gateway enabled remote access         
products. Variances in research and development labor costs reflect a trend in  
the engineering job market of acquiring engineering resources through           
independent contractors rather than full time employees.                        

  In June 2000 the board of directors approved a plan to phase out Ariel's low
end products and reduce ongoing investment in these products in Europe.         
Accordingly, Ariel recorded a special non-recurring charge of approximately     
$2,356,000 including the impairment of goodwill of approximately $1,546,000     
associated with Ariel's 1998 acquisition of SCii Telecom, S.A. (see note 3 to   
the financial statements).                                                      

In addition, effective May 31, 2000 Ariel terminated the employment of Jay
Atlas, its president and Chief Executive Officer, and entered into a            
termination and separation agreement with Mr. Atlas. As a result of Mr. Atlas'  
termination agreement, Ariel recorded a charge of $810,515, which reflects      
severance and related employee benefits payments of $306,145 and an estimated   
value of $504,370 for the extension of stock options that vested during Mr.     
Atlas' employment. As of December 31, 2000, $157,597 of the accrued severance   
has been paid.                                                                  

Interest expense was $373,092 for the year ended December 31, 2000 as     
compared to interest expense of $527,611 for the year ended December 31, 1999.  
Interest expense in both periods consisted primarily of interest                

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on the term and revolving credit notes outstanding under Ariel's credit         
facility with Transamerica. The reduction in interest expenses was due to a     
reduction in debt of approximately $1.9 million during 2000. Interest income    
for the year ended December 31, 2000 of $372,984 was down from $440,477 for the 
year ending December 31, 1999 due to lower investment income as a result of     
declining cash balances in 2000.                                                

  There was no tax provision for the year ended December 31, 2000 and 1999 due
to losses reported for that period.                                             

Ariel qualified for the sale of certain net operating tax losses and      
research and development credits under a New Jersey economic incentive program. 
A benefit of $423,938 was recognized in November 2000 upon the sale of research 
and development credits under the program.                                      

For the foregoing reasons Ariel incurred a net loss of $15,648,052 for the
year ended December 31, 2000 as compared to losses of $12,499,815 for year      
ended December 31, 1999.                                                        

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998           

Worldwide sales were $11,626,546 for the year ended December 31, 1999, a  
decrease of $5,819,283 compared to net sales of $17,445,829 for the year ended  
December 31, 1998. Domestic sales were $10,459,550 for the year ended December  
31, 1999 compared to $15,720,887 for the year ended December 31, 1998, a        
decrease of $5,207,214. The decrease is related to widespread use of the        
Internet and improved Internet security by late 1998. As a result, enterprises, 
who had met remote access needs through PC Integrators such as Compaq           
Computers, outsourced their remote access need to Internet Service Providers    
(ISPs). The decrease in sales attributable to this shift included a decrease of 
approximately $4.2 million in sales to Compaq, a major PC Integrator customer,  
who had discontinued its networking group. Other PC Integrators selling to the  
enterprise market comprised the remaining 1999 domestic sales variances from    
the previous year.                                                              

International sales were $1,166,996 for the year ended December 31, 1999  
including U.S. exports of $769,531 and sales from European subsidiaries of      
$397,465 compared to international sales of $1,724,942 for 1998. The decrease   
is attributable to a reduction in demand by an OEM customer for Ariel's audio   
mixing product, as well as a reduction in sales of T1 Modem Plus products due   
to the release of Ariel's RS2000 product. Those decreases were partially offset 
by sales from Ariel's European subsidiaries.                                    

  Gross profit increased by $1,049,923 or 19% to $6,530,532 for the year ended
December 31, 1999 from $5,480,609 for the year ended December 31, 1998. Gross   
profit margin was 56% for the year ended December 31, 1999 compared to 31% for  
the year ended December 31, 1998. The increase in gross profit margin as a      
percent of sales reflects the continued shift in product mix from lower margin  
shipments to PC integrators to shipments to OEM's customers that carry higher   
gross margins. 1999 gross profit was reduced by $195,000 for the write-down of  
RS2000 inventory. Ariel introduced the RS4200 in the fall of 1999 which has     
improved price and performance compared to the RS2000. Consequently, sales of   
the RS2000 may be affected. As a result, price reductions are planned and a     
write-down to affect lower of cost or market valuation was applied.             
Additionally, 1998 profit margins reflect a charge of approximately $2.0        
million for the write-down of certain inventory primarily related to T1 Modem+  
and RS1000 products. The write-down was the result of a substantial reduction   
in demand from several major customers including Compaq. Ariel negotiated       
additional sales with Compaq in the fourth quarter of 1998 and has sought new   
markets for these products. However, due to the introduction of Ariel's next    
generation RS2000 product family in September 1998, and Ariel's change in focus 
from enterprise customers to ISPs, management expected substantially reduced    
demand for these products from Compaq and other T1-Modem+ customers in 1999 and 
beyond. Consequently, current inventory levels are projected to be in excess of 
expected future consumption. 1998 gross profit margins were 42.9% before this   
write-down.                                                                     

Sales and marketing expenses were $5,634,070 or 48% of sales for the year 
ended December 31, 1999 compared to $5,265,542 or 30% of sales for the year     
ended December 31,1998. The increase of $368,528                                

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reflects incremental spending in 1999 of $391,331 for advertising, and          
marketing programs related primarily to the launch of Ariel's ISP PowerPOP      
architecture and $459,598 for European operations. Those increases were offset  
by decreases in commissions of $128,383 and related sales travel of $25,046 due 
to lower sales volume. Additionally, depreciation was reduced by $214,289 due   
to the disposition of certain trade show and demonstration material resulting   
from Ariel's market shift.                                                      

General and administrative expenses were $7,312,680 for the year ended    
December 31, 1999 compared to $9,710,275 for the year ended December 31, 1998.  
The decrease of $2,397,595 is due in part to certain non-recurring expenses     
recorded in 1998. Those expenses included bonuses paid in September 1998 of     
$1.1 million in connection with the sale of Ariel's CSG group in that month and 
a reduction in staff salaries as a result of the sale. Other non-recurring      
expenses in 1998 included approximately $842,000 related to severance and       
separation agreements with respect to an officer of Ariel and a consultant,     
$175,000 related to the settlement of a licensing dispute and $292,923 of       
warranty expense related to the return of certain equipment from a major        
customer. Additionally, 1998 general and administrative expenses included a     
provision for doubtful accounts for Hayes Microcomputer, Inc. and its           
affiliates when Hayes filed for bankruptcy protection. Accordingly, provisions  
for doubtful accounts decreased by approximately $231,000 as compared to the    
year ended December 31, 1999. Additional expense reductions include a decrease  
of approximately $1,170,000 in consulting fees resulting from the termination   
of consulting agreements early in 1999. Those decreases were partially offset   
by an increase of $588,734 in general and administrative expenses and $918,572  
in amortization of goodwill related to Ariel's European subsidiaries acquired   
in November 1998, (see Note 3 to the financial statements).                     

Research and development expenses were $5,688,414 or 49% of sales for the 
year ended December 31, 1999 compared to $6,722,905 or 39% of sales for the     
year ended December 31, 1998, a decrease of $1,034,491. Expenses declined by    
$2,309,430 from the same period in 1998 due to the sale of Ariel's              
Communications Systems Group (CSG) to Cabletron in September 1998. 1998 R&D     
expenses also included in-process research and development costs of $297,330    
related to the acquisition of SCii Telecom, SA in November 1998, (see Note 3 to 
the financial statements). These decreases were offset by an increase in        
research and development of $667,932 resulting from investments in products and 
technologies at this subsidiary. Additionally, expenses increased due to        
bonuses paid to engineers in conjunction with employment contracts of           
approximately $885,000.                                                         

  With Ariel's decision to focus on the ISP market and in combination with its
newly created sales channel through KeyLink Systems, Ariel terminated the       
employment agreement of Brian Hoerl, its Vice-President of OEM Sales and        
entered into a termination agreement with Mr. Hoerl effective August 20, 1999.  
Two additional field sales-reps were also terminated in the third quarter of    
1999. As a result, Ariel recorded a restructuring charge in September 1999 of   
$369,528, which reflects severance and related benefits payments.               

 Interest expense of $527,611 for the year ended December 31, 1999 consisted
primarily of interest on the term and revolving credit notes outstanding under  
Ariel's credit facility with Transamerica. Interest expense of $1,371,970 for   
the year ended December 31, 1998 included interest related to the Transamerica  
facility as well as a one-time charge of $750,000 in accordance with the terms  
of a $2.0 million bridge loan drawn down on February 19, 1998 against the       
anticipated proceeds of the sale of the Communications Systems Group. Interest  
income of $440,477 and $432,596 for the years ended December 31, 1999 and 1998  
respectively consisted of income from the investment of Ariel's cash.           

There was no tax provision for the year ended December 31, 1999 due to    
losses reported for that period. For the year ended December 31, 1998 a tax     
provision of $368,632 was recorded to reflect Ariel's estimated federal and     
state income tax liability for 1998 income. This liability was partially offset 
by the use of the net operating losses Ariel incurred in previous years.        
Alternative minimum tax rules limit the use of those operating losses to        
entirely offset Ariel's 1998 income tax liability.                              

  For the foregoing reasons Ariel reported a net loss of ($12,499,815) for the
year ended December 31, 1999 as compared to net income of $12,076,506 for the   
year ended December 31, 1998.                                                   

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Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000 

Worldwide sales were $881,656 for the three months ended March 31, 2001, a
decrease of $1,190,565 compared to net sales of $2,072,221 for the three months 
ended March 31, 2000. Domestic sales were $797,346 for the three months ended   
March 31, 2001 compared to $1,797,907 for the three months ended March 31,      
2000. The decrease in sales of $1,000,561 was attributable to a decrease in     
sales of older DSP products to OEMs. In June 2000 Ariel notified its customers  
that it would no longer offer certain older DSP products due to the lack of     
availability of component parts and the prohibitive cost of production, testing 
and technical support for these older products. Therefore, these products could 
no longer be made generally available after December 31, 2000. This caused a    
one-time increase in orders and sales for these products in the second half of  
2000 and a larger relative decline in OEM revenue in 2001. New OEM projects     
typically require 18-24 months from the award of a project to the realization   
of a ramp in revenue. From 1997 through 1998 Ariel curtailed pursuit of new OEM 
projects while it focused on PC manufacturers. This additionally contributed to 
decreases in overall OEM revenues. Decreases in OEM revenue were only partially 
offset by sales of Ariel's RAS products to ISPs due to a sudden and sharp       
decrease in capital expenditures by Internet Service Providers and              
telecommunications vendors.                                                     

International sales were $84,310 for the three months ended March 31, 2001
including U.S. exports of $32,576 and sales from European operations of $51,734 
compared to $274,314 for the same period of 2000. In June 2000, Ariel decided   
to phase out low-end basic rate ISDN (BRI) products of its French subsidiary,   
SCii Telecom SA. The decision was based on reduced sales of BRI products due to 
the loss of major customers and advances in competing technologies.             
Accordingly, the decrease of $190,004 reflects a decrease in sales of BRI       
products.                                                                       

Gross profit decreased by $947,699 to $256,148 for the three months ended 
March 31, 2001 from $1,203,847 for the three months ended March 31, 2000. Gross 
profit was 29% of sales for the three months ended March 31, 2001 compared to   
58% for the three months ended March 31, 2000. The decrease in gross profit was 
due to the reduced sales of older DSP products. The decrease in gross profit as 
a percentage of sales is primarily due to the loss of higher gross margin sales 
to OEM customers for both RAS and DSP products as well as the impact of fixed   
manufacturing overhead on reduced sales for the period. Reserves for inventory  
in excess of expected demand did not materially impact gross profit for the     
three months ended March 31, 2001, however, Ariel continues to review expected  
demand and adjust the carrying value of inventory as necessary.                 

Sales and marketing expenses were $1,064,854 for the three months ended   
March 31, 2001 compared to $1,266,834 for the three months ended March 31,      
2000. The decrease of $201,980 or 16% is primarily due to decreased             
participation in trade shows during the three months ended March 31, 2001 as    
compared to the prior year period. Such decreases were related to booth space   
and travel of approximately $76,000 and $37,000, respectively. Additionally,    
expenses related to public and investor relations were approximately $63,000    
less in the three months ended March 31, 2001 over the prior year period.       
Decreases in European sales and marketing expenses of approximately $80,000     
reflect the discontinuance of both DSP and SCii's BRI products. Such decreases  
were partially offset by increased salaries and the deployment of product       
demonstration units of approximately $20,000 and $27,000, respectively.         

General and administrative expenses were $1,935,011 for the three months  
ended March 31, 2001 compared to $1,468,396 for the three months ended March    
31, 2000. The increase of $466,075 is due to the accrual of approximately       
$582,000 for professional fees related to the merger of Ariel with MAYAN        
Networks of San Jose, CA (see Note 5 to the financial statements). Other        
increases included increased directors and officers insurance premiums of       
$33,330 and increases in reserves for future warranty costs of $40,000. Such    
increases were partially offset by a reduction in amortization expense of       
approximately $183,000, related to Ariel's November 1998 acquisition of Scii.   
In February 2001, Ariel reached a settlement with SCii's former parent, Alis    
Technologies, and received approximately $600,000 towards the settlement during 
the quarter ended March 31, 2001. Proceeds of approximately $565,000 were       
reflected as an adjustment to the purchase price and offset against remaining   
goodwill and intangibles at March 31, 2001.                                     

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  Research and development expenses were $1,090,516 for the three months ended
March 31, 2001 compared to $1,281,626 for the three months ended March 31,      
2000, a decrease of $191,110. The decrease is primarily due to the reduction in 
salaries and related expenses of $196,220 and savings of $66,000 resulting from 
the discontinuance of both DSP and SCii's BRI products. Such decreases were     
offset by increases in contract labor and material costs of approximately       
$72,000 for engineers related to development of Ariel's SS7 Gateway enabled     
remote access products.                                                         

For the foregoing reasons Ariel incurred a net loss of $3,848,834 for the 
three months ended March 31, 2001 as compared to losses of $2,960,245 for the   
three months ended March 31, 2000.                                              

Liquidity and Capital Resources                                                 

Ariel has incurred net losses of approximately $15.6 million and $12.5    
million for the years ended December 31, 2000 and 1999, respectively, and $3.8  
million for the three months ended March 31, 2001 and expect to incur costs and 
expenses in excess of revenues as Ariel continues to execute its business       
strategy in the ISP and OEM markets. Absent the pending transaction with MAYAN  
Networks Corporation described in Note 20 to the financial statements (which is 
contingent upon a number of factors), Ariel has limited financial resources     
available to support its ongoing operations, fund product development programs  
to develop and market new competitive remote access technology, and pay its     
obligations as they become due.                                                 

  These factors raise substantial doubt concerning Ariel's ability to continue
as a going concern. The consolidated financial statements do not include any    
adjustments relating to the recoverability and classification of asset carrying 
amounts or the amount and classification of liabilities that might result       
should Ariel be unable to continue as a going concern. Ariel's ability to       
continue as a going concern is dependent upon the ongoing support of Ariel's    
stockholders, creditors, and certain key customers, the consummation of the     
pending transaction with MAYAN Networks Corporation (or the closing of similar  
debt or equity transactions), and/or Ariel's ability to successfully develop    
and market its remote access products and technology at economically feasible   
levels in a highly competitive and rapidly changing technology environment.     

Ariel maintains a credit facility with Transamerica Business Credit       
Corporation. Currently Ariel has a five-year, $3 million term loan ("Term       
Loan"). As of March 31, 2001, there was $1,653,048 outstanding under the Term   
Loan. (See Note 3 to the financial statements.)                                 

Ariel drew down $4 million under the Term Loan on June 12, 1997 when Ariel
signed the agreement. Term Loan payments of principal and interest are due in   
arrears in twenty consecutive quarterly installments, payable on the first day  
of each calendar quarter commencing October 1, 1997. The interest rate under    
the term loan is based on the weekly average of the interest rate on five year  
U.S. Treasury Securities for stated periods plus an agreed upon number of       
additional basis points. At December 31, 2000, the interest rate in effect was  
12.10%.                                                                         

On March 28, 2001 Ariel entered into a definitive agreement and plan of   
merger with MAYAN Networks which upon consummation requires Ariel to, among     
other things, effect a reverse stock split and to issue additional shares to    
MAYAN's shareholders immediately after the reverse stock split. Upon            
consummation of the transaction, MAYAN shareholders will control approximately  
90% of Ariel's outstanding voting stock.                                        

The consummation of the transaction requires, among other things, the     
approval of the plan of merger by shareholders of both companies, the effective 
registration with the SEC of the shares to be issued and the listing of those   
shares with NASDAQ.                                                             

The agreement and plan of merger also provides for a Promissory Note (the 
"Note"). The Note calls for MAYAN to provide up to $2 million in debt financing 
to Ariel on an as needed basis until the transaction is consummated or          
otherwise terminated. In the event MAYAN chooses to terminate the merger        
agreement due to a superior offer, the Note becomes a term note with any        
principal and accrued interest payable on the one year                          

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anniversary of the termination. Should the merger agreement otherwise terminate 
amounts due on the Note would be due and payable upon termination.              

Ariel must maintain compliance with certain representations and warranties
and not be in breach of the covenants of the merger agreement to draw down      
funds against the Note. The Note has an annual interest rate of 8% and is       
secured by subordinated security agreements on Ariel's tangible and             
intellectual property.                                                          

  Ariel had drawn down $300,000 as of March 31, 2001. As of May 21, 2001 there
was a total of $2,000,000 outstanding.                                          

On February 24, 2000 Ariel entered into an agreement to sell 2,151,000    
shares of its common stock at $4.00 per share in a private placement. On March  
2, 2000 this transaction was completed resulting in net proceeds of             
approximately $7.8 million. In addition to the sale of its common stock Ariel   
also issued 2,151,000 warrants to purchase common stock at $6.875. Under the    
terms of the agreement, Ariel agreed to file a registration statement on or     
before April 4, 2000 to register the shares sold and those underlying the       
warrants.                                                                       

During the year ended December 31, 2000, there was a net decrease in cash 
and cash equivalents of $5,959,185. At December 31, 2000, cash and cash         
equivalents amounted to $1,129,246. Working capital amounted to $2,385,855 at   
December 31, 2000. This as compared to working capital of $7,827,522 at         
December 31, 1999.                                                              

Net cash used in operating activities for the year ended December 31, 2000
amounted to $11,469,679. The negative cash flows from operations were the due   
primarily to Ariel's net loss of $15,648,052 which was offset by non-cash       
expenditures related to depreciation, amortization, reserves and allowances of  
$3,637,957 and impairment of goodwill and restructuring charges of $2,050,511.  
Increases in operating cash due to collections of accounts receivables          
accounted for $614,457. Operating cash uses included decreases in accounts      
payable and accrued liabilities of $1,189,935 as Ariel paid down obligations of 
its subsidiary and accrued costs related to the sale of CSG and executive       
bonuses. Additionally, increases in inventory related to the introduction of    
the RS4200 and SS7 Gateway products resulted in a decrease in operating cash of 
$206,176.                                                                       

Net cash used in investing activities for the year ended December 31, 2000
amounted to $758,931 due to the purchases of computer and peripheral equipment  
related mainly to a research and development test lab and final test and        
assembly equipment in manufacturing.                                            

Cash from financing activities increased $6,251,456 for the year ended    
December 31, 2000 as a result of proceeds of $8,067,216 from the issuance of    
common stock and exercise of outstanding stock options and warrants. Those      
increases were offset by principal payments on debt of $1,815,760.              

During the year ended December 31, 1999, there was a net decrease in cash 
and cash equivalents of $10,908,144. At December 31, 1999, cash and cash        
equivalents amounted to $7,088,431. Working capital amounted to $7,827,522 at   
December 31, 1999 as compared to working capital of $12,632,033 at December 31, 
1998.                                                                           

Net cash used in operating activities for the year ended December 31, 1999
amounted to $12,567,511. The negative cash flows from operations were due       
primarily to Ariel's net loss of $12,499,815 which was offset by non-cash       
expenditures related to depreciation, amortization, reserves and allowances of  
$2,938,550. Other operating cash uses included decreases in accounts payable    
and accrued liabilities of $2,683,382 as Ariel paid down obligations of its     
subsidiary and accrued costs related to the sale of CSG and executive bonuses.  
Additionally, increases in inventory related to the introduction of the RS2000  
and RS4200 resulted in a decrease in operating cash of $729,945. Those          
decreases were partially offset by increases in accounts receivable of $69,335. 

Net cash used in investing activities for year ended December 31, 1999    
amounted to $593,851 due to the purchases of computer and peripheral equipment  
related mainly to a research and development test lab and final test and        
assembly equipment in manufacturing.                                            

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Cash from financing activities increased $2,215,963 for the year ended    
December 31, 1999 as a result of proceeds of $4,326,540 from the exercise of    
outstanding stock options and warrants. Those increases were offset by          
principal payments on debt of $2,085,316 and capital lease obligation payments  
of $25,261.                                                                     

During the year ended December 31, 1998, there was a net increase in cash 
and cash equivalents of $15,350,711, including an amount of $31,348,753 in      
proceeds net of transaction costs from the sale of assets related to the        
Communications Systems Group. On July 27, 1998 Ariel received a deposit of      
$5,000,000 on the sale and on September 1, 1998 Ariel received the remaining    
gross proceeds of $28,500,000. At December 31, 1998, cash and cash equivalents  
amounted to $17,996,575. Working capital amounted to $12,632,033 at December    
31, 1998 compared to $4,329,018 at December 31,1997, an increase of $8,303,015. 

 Net cash used in operating activities for 1998 amounted to $16,176,526. The
negative cash flow from operations was primarily the result of Ariel's net      
operating loss of $16,218,113. Additional operating decreases include accounts  
receivable of $2,813,966, reflecting an increase in collection days, and        
increases in inventory balances of $1,700,796 related to slow moving and excess 
inventory.                                                                      

 Net cash provided by investing activities for 1998 amounted to $27,284,599.
This included proceeds net of transaction costs of $31,348,753 from the sale of 
the Communications Systems Group and a decrease due to acquisitions of          
$3,340,122 net of cash acquired of $48,908. Capital expenditures of $724,032    
reflected purchases of computer and peripheral equipment for the engineering    
staff and final test and assembly in manufacturing.                             

Net cash provided by financing activities for the year ended December 31, 
1998 amounted to $4,242,638, reflecting proceeds of $4,500,000 received as a    
result of a draw on the Transamerica revolving credit facility and $2,051,412   
in proceeds from the exercise of common stock options. Additionally, decreases  
of $2,308,774 were incurred on principal payments of long-term debt.            

During the three months ended March 31, 2001, there was a net decrease in 
cash and cash equivalents of $705,769. At March 31, 2001, cash and cash         
equivalents amounted to $423,477. Working capital deficit amounted to $732,648  
at March 31, 2001. This as compared to working capital of $2,385,855 at         
December 31, 2000.                                                              

Net cash used in operating activities for the three months ended March 31,
2001 amounted to $1,503,422. The negative cash flows from operations were due   
primarily to Ariel's net loss of $3,848,834, before non-cash expenditures       
related to depreciation, amortization, reserves and allowances of $440,221.     
Increases in cash due to collections of trade and other receivables accounted   
for approximately $1,998,000.                                                   

Net cash provided by investing activities for the three months ended March
31, 2001 amounted to $690,810 due to proceeds of approximately $565,000         
received in connection with the settlement of a dispute with Alis Technologies, 
the seller of SCii, and net proceeds of $130,000 from investments that matured  
during the period. The proceeds from the Alis Technologies settlement were      
recorded as an adjustment to the SCii purchase price.                           

Cash from financing activities increased by $107,341 for the three months 
ended March 31, 2001. The increase was due to proceeds received under the terms 
of a Bridge Loan with MAYAN in the amount of $300,000. Such increase was offset 
by principal payments on Ariel's capital lease obligations and its Term Note    
with Transamerica in the amounts of $28,907 and $163,752, respectively.         

Qualitative and Quantitative Disclosures About Market Risk                      

The results of Ariel's operations and the valuation of some of Ariel's    
assets and liabilities are sensitive to changes in the general level of         
interest rates in the United States and foreign exchange rate fluctuations.     

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Ariel's interest income is sensitive to changes in the general level of   
interest rates in the United States, as Ariel's investments are in United       
States dollar cash equivalents and short-term instruments.                      

Ariel's interest expense is sensitive to changes in the general level of  
interest rates in the United States, because the computation of interest due on 
Ariel's debt in the United States is based on key interest rate indicators used 
in the United States such as the prime rate.                                    

Ariel currently has foreign subsidiaries that conduct and report their    
operations in local currency. The primary foreign currency is the French Franc. 
Other currencies include the British Pound and the German Deutschmark. On       
January 1, 1999, eleven member countries (including France and Germany) of the  
European Union established fixed conversion rates between their existing, or    
local, currencies and one common currency, the euro. The euro trades on         
currency exchanges and may be used in business transactions. Conversion to the  
euro eliminates currency exchange risk between the participating member         
countries.                                                                      

Due to the limited contribution of Ariel's foreign subsidiaries to its    
results of operations and the short-term nature of Ariel's cash equivalents,    
investments and debt, Ariel does not believe it has material market risk        
exposure.                                                                       

Recent Pronouncements                                                           

In March 2000, the Financial Accounting Standards Board issued            
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock     
Compensation, an interpretation of APB Opinion No. 25" ("FIN No. 44"). The      
interpretation provides guidance for certain issues relating to stock           
compensation involving employees that arose in applying APB Opinion No. 25.     
Among other things, this interpretation clarifies (a) the definition of an      
employee for purposes of applying APB Opinion No. 25, (b) the criteria for      
determining whether a plan qualifies as a noncompensatory plan, (c) the         
accounting consequence of various modifications to the terms of a previously    
fixed stock option or award and (d) the accounting for an exchange of stock     
compensation awards in a business combination. The provisions of FIN No. 44 are 
effective July 1, 2000, except for the provisions regarding modifications to    
fixed stock options or awards that reduce the exercise price of an award, which 
apply to modifications made after December 15, 1998. Provisions regarding       
modifications to fixed stock options or awards to add reload features apply to  
modifications made after January 12, 2000. The effect of adopting FIN No. 44    
did not have a material impact on Ariel's financial statements.                 

 In December 1999, the staff of the SEC issued SAB 101, which summarizes the
staff's interpretations of the application of generally accepted accounting     
principles to revenue recognition. The staff provided this guidance due in part 
to the large number of revenue recognition issues that it has encountered in    
registrant filings. In June 2000, SAB 101B, "Amendment: Revenue Recognition in  
Financial Statements", was issued, which deferred the effective date of SAB 101 
until the fourth fiscal quarter of 2000. The effect of adopting SAB 101 did not 
have a material impact on Ariel's financial statements.                         

 In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.       
133"). This statement establishes accounting and reporting standards for        
derivative instruments, including certain derivative instruments embedded in    
other contracts, and for hedging activities. It requires recognition of all     
derivatives as either assets or liabilities on the balance sheet and            
measurement of those instruments at fair value. If certain conditions are met,  
a derivative may be designated specifically as: (a) a hedge of the exposure to  
changes in the fair value of a recognized asset or liability or an unrecognized 
firm commitment (a fair value hedge), (b) a hedge of the exposure to variable   
cash flows of a forecasted transaction (a cash flow hedge), or (c) a hedge of   
the foreign currency exposure of a net investment in a foreign operation, an    
unrecognized firm commitment, an available-for-sale security, or a foreign-     
currency-denominated forecasted transaction. In June 1999, the Financial        
Accounting Standards Board issued SFAS No. 137, delaying the effective date of  
SFAS No. 133. The provisions of SFAS No. 133 are effective for all fiscal       
quarters of all fiscal years beginning after June 15, 2000. The adoption of     
SFAS No. 133 by Ariel, effective January 1, 2001, had no effect on Ariel.       

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INFORMATION ABOUT MAYAN 

 MAYAN designs, develops and markets telecommunications networking solutions
to address the bandwidth constraints, complexity and service limitations of     
metropolitan edge networks. Voice and data traffic from businesses and          
consumers enter and exit the public telecommunications network at metro edge    
networks. MAYAN's objective is to become a leading provider of next generation  
networking solutions, including software, hardware and services, for the metro  
edge.                                                                           

Industry Background                                                             

Growth in Network Traffic                                                     

The volume of data traffic over communications networks has grown         
dramatically, fueled primarily by the emergence of the Internet as an essential 
communications and transaction medium. According to Ryan Hankin & Kent, total   
Internet traffic in U.S. metropolitan areas is expected to increase by a factor 
of 43 from 1999 to 2003, growing from 350,000 terabytes, or trillions of bytes, 
per month at the end of 1999, to over 15,000,000 terabytes per month during     
2003. As access to and use of the Internet has proliferated, Internet-based     
data applications such as e-commerce, streaming video, remote access for        
telecommuters, remote data backup storage and application hosting have consumed 
a growing amount of network bandwidth. To accommodate the increase in data      
traffic as well as to meet the demand for bandwidth intensive applications and  
enhanced services, service providers have recognized the need to upgrade their  
communications networks.                                                        

Although data traffic has grown dramatically, substantially all of the    
revenue generated in the telecommunications market is from voice services.      
According to a March 2000 report by the Gartner Group, during 1999, revenues    
from voice services in North America amounted to nearly $200 billion, or        
approximately 90% of the total telecommunications market. MAYAN believes that   
in order to remain competitive, service providers must provide new, cost        
effective solutions to accommodate growth in network traffic and generate       
additional revenues from the increasing data traffic, as well as retaining      
current voice revenues.                                                         

Overview of the Communications Network                                        

Service provider communications networks generally consist of several     
interlinking networks: the public switched telephone network, or PSTN, which    
was designed only for voice communications, and the Internet and private        
corporate networks, which were designed primarily for data communications.      
While voice and data traffic travel together over copper, cable, wireless or    
fiber optics, they generally use different network equipment and rely on        
different protocols specifically designed for either voice or data traffic. The 
PSTN was designed as a circuit switched network in order to guarantee the       
quality of each call with a fixed amount of bandwidth dedicated to each         
connection, or circuit, whether utilized or not. The network equipment designed 
for the PSTN, however, does not transport data traffic efficiently because      
Internet traffic is divided into much smaller packet-based units of             
information.                                                                    

As data has consumed an increasing amount of the total network bandwidth, 
new network equipment and a number of new protocols have evolved to allow data  
traffic to be carried over the voice network. Data protocols such as Internet   
Protocol, or IP, frame relay, asynchronous transfer mode (ATM) and ethernet     
ride on top of the legacy voice network and carry the bulk of network traffic   
today. Data network equipment such as routers and ATM, frame relay and ethernet 
switches are different from their voice counterparts because they have been     
optimized for the small data packets that make up data traffic on the network.  

  Once voice and data traffic pass from the end user to the service providers'
network, it can be transported over fiber optic cables using a standard for     
fiber-optic transmission called synchronous optical network, or SONET. SONET    
specifies the electronics and the network architecture that enable transmission 
of traffic across optical fiber. The key benefit of the SONET architecture is   
that it is a reliable and uniform standard. SONET is expected to remain the     
dominant means of transport in the metro edge network, making up approximately  
75%                                                                             

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of the optical systems metro edge market during the period from 2000 to 2004,   
according to Pioneer Consulting. While SONET provides many benefits, the        
existing transmission equipment based on SONET deployed in metropolitan edge    
networks was not designed to support the increases in complex and varied data   
traffic. This has resulted in inefficiency in the transmission of data over the 
network, and service providers have often undertaken costly capital             
improvements to upgrade their existing networks.                                

Current Topology of the Network                                               

 The current public telecommunications network infrastructure can be divided
into three segments: long-haul networks, metropolitan core networks and         
metropolitan edge networks.                                                     

Long-Haul Networks. Long-haul networks move large amounts of traffic from 
point-to-point over long distances, such as from San Francisco to Boston. Long- 
haul networks connect points of presence of long distance carriers within North 
America and metropolitan core networks around the world. The long distance      
carriers, commonly known as InterExchange Carriers, have historically included  
AT&T, Worldcom, Sprint and international carriers such as NTT and British       
Telecom.                                                                        

Metropolitan Core Networks. Metropolitan core networks connect long-haul  
networks to metropolitan edge networks and service providers' central offices   
to each other over distances of a few miles in dense urban business corridors   
or a few hundred miles in regional urban and suburban settings. Metropolitan    
core networks aggregate metropolitan edge traffic and transport it throughout   
the metropolitan area and to and from long-haul networks.                       

Metropolitan Edge Networks. Voice and data traffic enters and exits the   
public telecommunications network at the metropolitan edge. Metropolitan edge   
networks aggregate traffic from businesses and consumers and switch it to the   
metropolitan core network. The bulk of the existing SONET infrastructure is     
deployed in metropolitan edge networks. These edge networks are more complex    
and difficult to manage than long-haul and metropolitan core networks due to    
the wide variety of services and protocols configured over diverse equipment    
and platforms.                                                                  

Optical technologies were first deployed in long-haul networks, where the 
capacity constraints of the existing infrastructure were first encountered and  
the simple architecture and homogeneous traffic made it technically feasible    
and cost effective. Eventually, optical technology advanced to permit a similar 
solution in the metropolitan core network. However, MAYAN believes it is        
unlikely that optical technologies built for the metropolitan core and long-    
haul networks will be adopted at the metro edge in the near term because of the 
complexity at the metro edge.                                                   

Challenges at the Metro Edge                                                  

MAYAN believes that in order to remain competitive, service providers must
be able to terminate, switch and route a vast array of traffic types and        
services. This requires optical access equipment and complex switching and      
routing equipment and systems utilizing a wide variety of protocols. Service    
providers must also be able to accommodate varying data rates and unpredictable 
growth. However, traditional SONET infrastructure only supports strictly        
defined, fixed transfer rates, which are characteristic of circuit-based        
traffic. Bandwidth is wasted as packets of data are forced into voice circuits. 
Communication service providers seeking to develop and introduce next           
generation services to their customers at the metro edge therefore face         
significant challenges that MAYAN believes are not adequately addressed by      
current solutions. These challenges include:                                    

 Complexity at the Metro Edge. Today, customers in metropolitan areas demand
a diverse and growing array of voice and data services. In a single location,   
service providers must be able to support different protocols, such as time     
division multiplexing (TDM) for voice transmission, IP, frame relay, ATM,       
ethernet and varying versions of digital subscriber line (DSL), over different  
media, such as copper or fiber, and at varying speeds, such as T1, T3 and OC-3, 
and functionality, such as switching, routing and multiplexing. Traditional     

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solutions generally have required several hardware devices such as add/drop     
multiplexers (ADMs), digital crossconnect systems (DCSs), switches and routers  
to provide such services and to support such functionality and protocols. MAYAN 
believes next generation equipment must be designed to support a diverse        
customer base with varying equipment and service needs.                         

Migrating Existing Infrastructure for Next Generation Capabilities. In a  
July 2000 report, the Gartner Group estimated that between 1994 and 1999        
approximately $250 billion was spent on telecommunications infrastructure       
equipment. Service providers continue to invest incrementally in more costly    
and complex network equipment in order to remain competitive and respond to the 
growing demands of data traffic. As new equipment has been added to legacy      
networks, the operation, administration, maintenance and provisioning of voice  
and data services at the metro edge has become more difficult and expensive.    
The challenge for service providers at the metro edge is to provide next        
generation services efficiently and in a cost effective manner without having   
to replace or reconfigure their existing infrastructure.                        

Fiber Exhaust at the Metro Edge. Traffic growth forecasts far exceed the  
growth in network capacity as evidenced by projected network capital            
expenditures. The process of expanding capacity with new fiber is time-         
consuming and requires a major capital investment by the service provider, as   
well as personnel skilled with existing and next generation systems. In         
addition, new optical technologies, such as wavelength-division multiplexing    
(WDM), have dramatically increased capacity in the core networks but are        
currently too expensive and too large in scale to meet the diverse demand for   
voice and data services from users at the metro edge. As a result, service      
providers must find new and more cost-effective solutions for capacity          
expansion. These solutions must also be able to respond to unpredictable growth 
in capacity demand.                                                             

To date, attempts to ease the bottleneck at the metro edge have focused on
increasing bandwidth. These attempts include deploying additional fiber and     
increasing transmission rates on existing fiber with new equipment and          
technologies. These solutions are not cost effective and do not simplify the    
complexity at the metro edge because they do not aggregate the various types of 
traffic found there.                                                            

MAYAN's Solutions                                                               

 MAYAN develops and markets telecommunications networking solutions designed
to address the bandwidth constraints, complexity and service limitations of     
metro edge networks. MAYAN's solutions are designed to integrate the            
functionality of many different types of equipment and protocols and provide    
switching, routing, cross connecting and multiplexing to enable service         
providers to offer multiple data and voice services efficiently over a single   
platform. MAYAN's initial solution is a hardware device called the Unifier SMX. 
To date, MAYAN has not sold the Unifier SMX, except to certain test customers.  
MAYAN may develop a less complex version of the Unifier SMX or scale back       
development of the Unifier SMX. MAYAN intends to continue to develop solutions  
that are intended to ease the growing traffic bottleneck at the metro edge and  
offer additional revenue-generating services while decreasing operational       
expenses. In addition, MAYAN may acquire, develop or market additional          
telecommunications networking solutions. The evolution of the existing service  
provider infrastructure will require a vast array of services and equipment to  
support the complex demands of growing voice and data traffic. To gain market   
acceptance, MAYAN expects its solutions, which may consist of hardware,         
software or services, will need to:                                             

. decrease complexity and improve network and management efficiency;        

. interoperate with the existing infrastructure;                            

. optimize the use of existing bandwidth; and                               

. be scalable and extendable to next generation services.                   

 MAYAN has to date focused on hardware development. In the future, MAYAN may
develop other aspects of its business, including its services business, and in  
particular, providing systems integration services for customers' networks.     
Should MAYAN choose to pursue this strategy, it would entail a substantial      
change in its                                                                   

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business. For example, MAYAN would have to manage a significant number of       
geographically-dispersed employees. Also, the financial model of a services     
oriented business is unlike MAYAN's current hardware product development        
business. MAYAN may choose to enter the services business through an            
acquisition or series of acquisitions, although MAYAN currently has not entered 
into binding agreements or formal understandings with respect to any            
acquisitions.                                                                   

MAYAN's Strategy                                                                

MAYAN's objective is to become a leading provider of next generation      
networking solutions for the metro edge. In order to achieve this objective,    
MAYAN must provide customers with solutions that allow them to carry increasing 
amounts of data traffic on metro edge networks while decreasing operating costs 
and providing opportunities for incremental revenue from new services. MAYAN    
intends to:                                                                     

Focus on the Metro Edge. From MAYAN's inception, MAYAN has focused on     
meeting the needs of service providers at the metro edge. Today, these needs    
include interoperability with legacy equipment, aggregation of multiple         
products and services, greater bandwidth and increasing cost effectiveness.     
MAYAN intends to leverage MAYAN's expertise in understanding the constraints of 
this segment of the network to offer increasingly intelligent products and      
services for use by service providers or users at the metro edge.               

Enable Customers to Provide New and Differentiated Services. MAYAN intends
to develop solutions that will increase the efficiency of network traffic and   
aggregate diverse services that travel over available bandwidth. MAYAN intends  
to offer solutions that improve the efficient use of bandwidth so that service  
providers can increase the number of customers they serve and the variety and   
functionality of the services they offer.                                       

Extend Professional Services. MAYAN has recruited skilled network         
consultants and service individuals who can assist customers in the design and  
build out of their networks and provide ongoing consultation to support these   
networks. MAYAN intends to expand MAYAN's professional services capability to   
provide a suite of integrated solutions and services that increase the          
efficiency of networks.                                                         

Establish Strategic Partnerships. To accelerate the time to market and    
reduce engineering development risk, MAYAN may develop OEM or other business    
relationships to acquire solutions for MAYAN's market. MAYAN believes that      
acquiring multiple solutions for the edge of the network will enhance its       
competitive position. MAYAN also intends to establish relationships with next   
generation equipment providers focused on metro core and long-haul networks in  
order to present service providers with unified, interoperable, end-to-end      
networking solutions. In addition, MAYAN will seek to establish partnerships    
with new technology vendors to complement MAYAN's functionality and provide     
additional value added services. MAYAN intends to partner with key suppliers to 
improve the availability and quality of product components.                     

Acquire Complementary Businesses, Products, Technologies and Services. To 
better compete against larger companies in a market where increasing            
competition and industry consolidation prevail, MAYAN may acquire complementary 
businesses, products, technologies and services which will enable it to extend  
its product and service offerings, gain critical mass and expand its resources. 

Architecture                                                                    

MAYAN's initial product, the Unifier SMX, was designed to make more       
efficient use of existing bandwidth, decrease operating costs, simplify         
complexity at the metro edge, and serve as a platform for new service           
offerings. The Unifier SMX was designed to eliminate the wasted bandwidth       
associated with traditional metro edge products. Its architecture breaks        
incoming traffic down to its simplest form, processes it, and then packs it     
into traditional SONET circuits destined for the metro core or long haul        
networks. It employs an architecture with the following features:               

.  the separation of physical interfaces from protocol processing;          

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.  voice and data buses;                                                    

.  scalability;                                                             

.  an integrated administrative processor;                                  

.  a redundant design; and                                                  

.  adherence to strict standards.                                           

With this architecture, the Unifier SMX can incorporate the functions of  
many previously separate products and enable service providers to offer several 
of the different user traffic types and services from one platform.             

Products                                                                        

The Unifier SMX was designed to be a carrier-class, multi-service optical 
platform that addresses the bottleneck and complexity at the metro edge. The    
Unifier SMX was designed to groom, route and switch TDM, IP, frame relay and    
ethernet traffic at the DS0 and packet level across the network, effectively    
eliminating the need for many existing products. The Unifier SMX was also       
designed to scale to handle new protocols, speeds and ports, providing          
customers with the flexibility to offer many current and future services        
quickly and cost-effectively.                                                   

MAYAN has not completed development of its Unifier SMX product, has only  
tested it on a limited basis, and has sold it only in trial quantities. In      
addition, in order to compete with larger companies with substantially greater  
resources and broader integrated product offerings, in the future, MAYAN may    
scale back the functionality of the Unifier SMX and develop or acquire other    
businesses, products, technologies or services.                                 

Customers                                                                       

MAYAN's prospective customers include any telecommunications service      
providers operating at the metro edge. In particular, MAYAN intends initially   
to focus on service providers that offer all types of voice and data services.  
MAYAN has sold only trial quantities of its products. MAYAN currently has       
deployed Unifiers for lab trials with prospective customers, and MAYAN is in    
discussions with other companies to deliver the Unifier SMX for trial and       
evaluation. Initially, MAYAN expects its revenue to be derived from a           
relatively small number of customers.                                           

Sales and Marketing                                                             

MAYAN has focused its sales and marketing efforts primarily on the major  
metropolitan networks in the United States and may expand its efforts to        
similar markets in Europe and Japan. MAYAN's marketing efforts are designed to  
create brand awareness and to demonstrate MAYAN's technological leadership in   
the metro edge equipment market. MAYAN is educating its potential customers     
about MAYAN's products and the benefits of MAYAN's solutions through industry   
publications and trade shows. MAYAN plans to market and sell its products       
primarily through its direct sales organization, which establishes and          
maintains direct relationships with prospective customers. As part of MAYAN's   
strategy to provide complete customer service, MAYAN employs systems            
engineering personnel in its sales process in order to address MAYAN's          
prospective customers' many technical issues. MAYAN also has a professional     
services group that is intended to help MAYAN's potential customers design,     
build and transition their networks.                                            

To be successful, MAYAN must expand its direct sales organization.        
Competition for qualified sales personnel and associated systems engineers is   
intense, and MAYAN may not be able to expand at the rate necessary to succeed   
or to take full advantage of the current market opportunity.                    

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Customer Technical Services and Support                                         

 MAYAN's customer technical services and support organization is responsible
for customer training, post-sales technical support and maintenance. MAYAN is   
establishing a Technical Assistance Center (TAC) and a Test and                 
Interoperability Lab, both of which are designed to allow MAYAN to provide      
effective and timely customer support. MAYAN intends to provide end-to-end      
solutions for its customers. MAYAN's customer technical services and support    
department consists of four main groups: technical consultants, support         
engineers, interoperability test/quality assurance engineers and field          
engineers.                                                                      

  Technical consultants will work with direct sales to provide network designs
and solutions for MAYAN's potential customers. MAYAN's consultants have         
extensive backgrounds in the engineering and operations of SONET and IP         
networks. They will help educate MAYAN's potential customers on the integration 
of MAYAN's products into their networks and facilitate the transition from      
sales to customer support.                                                      

  Interoperability and test engineers conduct compatibility testing in MAYAN's
Test and Interoperability Lab located in San Jose, California. As a critical    
part of MAYAN's solution, this group will ascertain whether MAYAN's product is  
interoperable with all standard-based network elements including SONET ADMs,    
routers, DCSs, frame relay and ethernet switches. Further, this group will also 
rigorously test for stability and performance in order to deliver quality       
products to MAYAN's potential customers.                                        

MAYAN's customer service and support personnel are highly trained and     
difficult to replace. Competition for qualified support personnel is intense,   
and MAYAN may be unable to hire enough people to adequately support its         
customers and its products. If MAYAN is unable to provide the quality and       
timing of customer service and support demanded by its customers, MAYAN's       
reputation and business would be harmed.                                        

Competition                                                                     

MAYAN competes in a rapidly evolving and highly competitive market. The   
metropolitan area telecommunications networking equipment market is dominated   
by manufacturers of legacy SONET equipment, including Nortel Networks, Lucent   
Technologies and Fujitsu. In addition to legacy SONET equipment suppliers, a    
number of companies recently acquired by Cisco Systems, and Siara, which was    
recently acquired by Redback Networks, offer or are developing metro edge       
access multi-service optical platforms, which are likely to compete with        
MAYAN's solutions. MAYAN believes that the principal factors that will          
determine competitive success include:                                          

.  cost-effectiveness;                                                      

.  support for multiple access technologies and network protocols;          

.  flexibility and interoperability with existing network designs and       
equipment;                                                            

.  ability to efficiently aggregate different traffic types;                

.  scalability without interruption of service; and                         

.  reliability.                                                             

Many of MAYAN's competitors are large companies with greater name         
recognition and technical, financial and marketing resources than MAYAN has     
which may give them a substantial advantage over MAYAN in developing and        
selling their products. Further, some of MAYAN's competitors have gained a      
significant share of the market for next-generation metropolitan area           
telecommunications networking equipment. Some are in a position to offer        
significant financing to MAYAN's potential customers. In addition, many of      
MAYAN's competitors have long-standing relationships with MAYAN's prospective   
customers, which may give them an advantage in selling competing products. In   
addition, MAYAN expects to compete with a number of small companies and new     
market entrants that are developing products that may compete with MAYAN's.     

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Research and Development                                                        

MAYAN's future success depends on its ability to develop and introduce new
products, product enhancements and technology that can support a broad array of 
network protocols and access methods. Achieving these objectives is dependent   
on the efforts of MAYAN's research and development team.                        

Patents and Intellectual Property                                               

MAYAN currently relies on a combination of patent, copyright and trademark
and trade secret laws, confidentiality procedures and contractual provisions to 
protect MAYAN's proprietary rights with respect to its technology and           
proprietary information. MAYAN has filed three patent applications and intends  
to file additional patent applications. MAYAN's patent strategy is designed to  
protect corporate technology assets, to create access to additional technology  
through cross licensing opportunities, and to create opportunities for          
additional revenue through technology licensing.                                

While MAYAN will use patent, copyright, trademark and trade secret laws to
protect its technology, MAYAN also believes that factors such as the            
technological and creative skills of its personnel, new product developments,   
frequent product enhancements and reliable product maintenance are essential to 
establishing and maintaining a technology leadership position. In addition,     
MAYAN has and will continue to license technologies from third parties when     
necessary or useful.                                                            

MAYAN's industry is characterized by a large number of patents and other  
intellectual property rights. Litigation to enforce or contest these rights is  
relatively common. If MAYAN became involved in any such litigation, MAYAN's     
patent applications could be denied, any patents granted could be invalidated   
or limited, or MAYAN could be forced to pay damages or to negotiate a license   
from a third party to continue to manufacture and sell MAYAN's products, which  
may not be available on commercially reasonable terms or at all. In addition,   
MAYAN may not be successful in preventing others from using its technology. Any 
of these events would divert management attention and resources from MAYAN's    
core business and could seriously harm MAYAN's business.                        

Manufacturing                                                                   

MAYAN currently intends to outsource significant portions of its          
manufacturing operation to a third-party manufacturer. MAYAN's manufacturing    
partner will provide services including material procurement and board level    
assembly, testing and quality control. MAYAN designs, specifies and monitors    
all of the tests that are required to meet internal and external quality        
standards.                                                                      

Solectron has built MAYAN's interface cards and systems being utilized in 
field trials and internal testing. MAYAN cannot assure you that its             
relationship with Solectron and the associated benefits to MAYAN will continue, 
or that MAYAN will be able to find substitute third-party manufacturers if this 
relationship does not continue.                                                 

In addition to relying on a small number of third parties to manufacture  
MAYAN's products, many of the components of MAYAN's products, including SONET   
integrated circuits and MAYAN's microprocessors, are procured from single or    
limited sources. If any of these sources were to become unavailable or the      
costs of MAYAN's components were to increase, MAYAN's ability to manufacture    
and deliver MAYAN's product in a timely manner or at all or to sell MAYAN's     
product at sufficient margins would be compromised and MAYAN's business and     
MAYAN's customer relationships would suffer.                                    

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Employees                                                                       

As of March 31, 2001, MAYAN had 130 full-time employees, 83 of whom were  
engaged in research and development, 29 in sales and marketing and 18 in        
finance and administration. None of its employees are represented by a labor    
union. MAYAN has not experienced any work stoppages and MAYAN considers its     
relations with its employees to be good.                                        

Facilities                                                                      

 MAYAN's corporate headquarters are located in San Jose, California where it
leases approximately 95,000 square feet of office space pursuant to a lease     
that expires in December, 2004. MAYAN currently only occupies a portion of this 
space and have subleased the remaining space, approximately 32,000 square feet. 
MAYAN believes that this arrangement provides it with sufficient space and      
flexibility to accommodate its anticipated growth. MAYAN also leases            
approximately 26,000 square feet of office space in Phoenix, Arizona and        
approximately 9,200 square feet of office space in Richardson, Texas. These     
leases expire in December, 2004 and November, 2001, respectively. When MAYAN's  
current lease expires, MAYAN may need new space in Richardson, Texas. The       
commercial real estate market is volatile and unpredictable in terms of         
available space, rental fees, and occupancy rates and preferred locations.      
MAYAN cannot be certain that additional space will be available when MAYAN      
requires it, or that it will be affordable or in a preferred location.          

Legal Proceedings                                                               

A complaint has been filed against MAYAN and one of its former officers   
alleging unfair hiring practices. The complaint alleges that MAYAN, with the    
help of its former officer and confidential information obtained through this   
officer, recruited the complainant's employees. The complaint seeks unspecified 
damages and equitable relief. MAYAN intends to defend this claim vigorously.    

MAYAN is currently not a party to any other material legal proceedings.   

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MANAGEMENT OF MAYAN 

Executive Officers and Directors                                                

 The following table sets forth information regarding the executive officers
and directors of MAYAN as of March 31, 2001:                                    

                                                                [Download Table]

          Name           Age Position                                     
          ----           --- --------                                     
                                                                          
                             Chief Executive Officer and Chairman of the  
Esmond T. Goei..........  50 Board                                        

Daniel J. Gatti.........  56 President and Director                       

                             Chief Financial Officer, Secretary and Senior
John R. Tingleff........  49 Vice President                               

Alan R. Brown...........  46 Vice President of Engineering                

Daniel W. Brown.........  34 Vice President of Product Marketing          

Sullivan J. Bookataub...  52 Vice President of Operations                 

James B. Linkous........  44 Senior Vice President of Worldwide Sales     

Farooq M. Raza..........  49 Vice President of Competitive Marketing      

Andrew White............  51 Vice President of Corporate Resources        

Thomas C. Edrington(2)..  62 Director                                     

Steven M. Krausz(2).....  46 Director                                     

James Mongiello(1)......  59 Director                                     

Peter T. Morris(1)......  44 Director                                     

--------                                                                        
(1)  Member of the compensation committee                                       

(2)  Member of the audit committee                                              

 Esmond T. Goei co-founded MAYAN in October 1997, has served as its Chairman
of the Board of Directors since October 1997 and its Chief Executive Officer    
since March 2001. Prior to founding MAYAN, Mr. Goei worked at Northern Telecom, 
where he last served as Director of the Corporate Venture Capital Division.     
Prior to that, he was Vice President of the Venture Capital Division at Toronto 
Dominion Bank and a Senior Systems Consultant at Touche Ross (now Deloitte &    
Touche). Mr. Goei has served as the Chief Executive Officer and President and   
Chairman of the Board of Directors of XiMnet Corporation, a web services        
company, from April 1999 to March 2001 and has served as its Chairman of the    
Board of Directors since April 1999. From July 1994 to January 1999, Mr. Goei   
served as the Chief Executive Officer, President and Chairman of the Board of   
Directors of Nhancement Technologies, Inc., a communications systems            
integration company. He currently serves on the board of directors of Ariel.    
Mr. Goei has a BS in Electrical Engineering from Queen's University at Kingston 
and an MBA from the University of Western Ontario.                              

 Daniel J. Gatti joined MAYAN in July 1998 and served as its Chief Executive
Officer and a director from July 1998 to March 2001 and has served as its       
President since July 1998. From June 1996 to May 1998, Mr. Gatti was the Vice   
President and General Manager of the Network Service Provider Division at 3Com  
Corporation, an integrated voice and data networking company. From May 1994 to  
June 1996, he worked at Primary Access Corporation, a provider of integrated    
network access systems, where he held various senior sales management           
positions. Prior to May 1994, he served as President of Aptec Computer Systems, 
Inc., a multimedia video servers developer for cable and communications service 
providers, Vice President of Marketing at Amdahl Corporation, a developer of    
computing devices, Vice President of Marketing at GTE Communications Systems    
Corp., a telecommunications company, and he also held various sales and sales   
management positions at IBM Corporation, a business services and computer       
company. Mr. Gatti also has served as Chairman of the Internet Institute and    
currently serves on the board of TIA (Telecommunication Industry Association),  
and on the advisory board of B-Path, an Internet portal company. Mr. Gatti      
earned a BA from Fairfield University and completed the executive MBA program   
at Harvard Business School.                                                     

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John R. Tingleff joined MAYAN in July 1998 as Chief Financial Officer and 
Secretary and was appointed Senior Vice President in March 2001. Prior to       
joining MAYAN, from October 1997 to June 1998, Mr. Tingleff was the managing    
principal with John Tingleff and Associates, a consulting firm. Prior to        
October 1997, he was the Chief Financial Officer of InterActual Technologies,   
Inc., a video compression technology company, from October 1996 to October      
1997, the Chief Executive Officer of Pinterra Inc., a developer of position     
location technology, from June 1995 to July 1996, and the Chief Executive       
Officer of S-TRON, a defense contractor, from June 1993 to June 1995. Prior to  
June 1993, he was a Partner with Technology Funding, a venture capital firm.    
Mr. Tingleff holds a BA and MA in Economics from San Francisco State            
University.                                                                     

Alan R. Brown joined MAYAN in November 1999, served as its General Manager
of Engineering from November 1999 to July 2000 and currently serves as its Vice 
President of Engineering. Prior to joining MAYAN, from September 1982 to        
November 1999, Mr. Brown worked at AG Communication Systems, a subsidiary of    
Lucent Technologies Inc., a communications and networking solutions provider,   
most recently as its Vice President of Engineering. Earlier, he held several    
development and management positions at Plessey PLC, a telecommunications       
company. Mr. Brown earned a BS in Electrical and Electronic Engineering from    
Edinburgh with honors.                                                          

  Daniel W. Brown joined MAYAN in August 1999 as its Vice President of Product
Marketing. Prior to joining MAYAN, from June 1997 to July 1999, Mr. Brown       
served as Vice President of Engineering at FirstWorld Communications, Inc., a   
network services provider. Prior to June 1997, Mr. Brown served as the          
directing engineer-ATM at 3Com from February 1996 to May 1997 and a systems     
engineer at Onstream Networks, Inc., a provider of ATM and broadband WAN access 
products, from February 1994 to January 1996. Earlier, he was the supervisor of 
the Global Network Management Center at British Telecom North America Inc.      

Sullivan Bookataub joined MAYAN in February 2001 as its Vice President of 
Operations. Prior to joining MAYAN, Mr. Bookataub served as Principal for       
Qualitivity, Inc., a consulting firm specializing in lean manufacturing and     
supply chain management, from January 1998 to March 1999. Prior to his service  
at Qualitivity, Inc., he served as Vice President of Operations for Logistix,   
Inc. from February 1997 to January 1998. Earlier, he served as Vice President   
of Operations and Quality for Pyramid Technology, Inc. Mr. Bookataub has a BS   
in Electrical Engineering from University of Rhode Island, a Masters in         
Business Administration from James Madison University of Virginia and an        
Executive MBA from Stanford University.                                         

 James B. Linkous joined MAYAN in March 2001 as its Senior Vice President of
Worldwide Sales. Prior to joining MAYAN, Mr. Linkous served as Executive Vice   
President of Ivendor, Inc., an electronic commerce company, from May 2000 to    
October 2000. From April 1998 to March 2000, he served as President of North    
American Division of Nhancement Technologies, a telecommunications software     
development and product distribution company. From September 1994 to April      
1998, he served as Vice President and General Manager for Nexus Integrated      
Solutions, which was acquired by EXPANET Communications. Earlier, Mr. Linkous   
held numerous management positions in the National Accounts Group with US WEST  
Communications.                                                                 

Farooq M. Raza co-founded MAYAN in October 1997 and has served as its Vice
President of Competitive Marketing since that time. Prior to co-founding MAYAN, 
Mr. Raza was the Senior Business Development Manager and Senior Product Line    
Manager at Verilink Corporation, a communications company, from June 1996 to    
September 1997. Prior to that, he served as the Senior Business Development     
Manager at Siemens AG, an electronics and electrical engineering company, from  
October 1994 to May 1996. Earlier, he held various product management, business 
development and systems architect positions in other companies, including,      
Amdahl and Hewlett-Packard Company, a business services and computer company.   
Mr. Raza was the Vice-Chair of the Residential and Small Business Workgroup of  
the ATM Forum. Mr. Raza has an MS in Communications Engineering from Manchester 
University, UK.                                                                 

  Andrew White joined MAYAN in October 1999 as its Vice President of Corporate
Resources. Prior to joining MAYAN, Mr. White served as the Chief Executive      
Officer at Selborne, Inc., a consulting firm specializing in human resource     
services, from May 1997 to September 1999. Prior to his service at Selborne,    
Inc., he worked at Amdahl from October 1983 to May 1997, where he held a number 
of senior positions,                                                            

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including Group Director of Human Resources. Mr. White graduated as a member of 
Institute of Personnel Management from Glasgow College of Commerce in Scotland. 

Thomas C. Edrington has served as a director of MAYAN since July 1998. Mr.
Edrington has been an independent consultant since May 1999. From September     
1994 to May 1999, he served as the Chief Executive Officer of Alaska            
Communications Systems Group, Inc., formerly ATU Telecommunications, a          
communications company. Mr. Edrington received a BA in Business Administration  
from UCLA and an MBA from the Stanford University Business School SEP program.  

Steven M. Krausz has served as a director of MAYAN since July 1998. Mr.   
Krausz has been a general partner of a number of venture capital firms,         
including U.S. Venture Partners III, IV, V, VI and VII, U.S. V Entrepreneur     
Partners and BHMS Partners III since 1985. He currently serves on the board of  
directors of Accelerated Networks Inc., a developer of multiservice over        
broadband access products, and Verity, Inc., a business portal powering         
company. Mr. Krausz received a BS in Electrical Engineering and an MBA from     
Stanford University.                                                            

James Mongiello has served as a director of MAYAN since July 1998. Mr.    
Mongiello has been a Venture Partner of Redpoint Ventures since October 1999    
and a Venture Partner of Brentwood Venture Capital since June 1998. From July   
1998 to March 2000, Mr. Mongiello was Chief Executive Officer of FreeGate       
Corporation, a provider of broadband access services. Prior to July 1998, he    
served as Vice President of 3Com, from November 1996 to June 1998. From June    
1994 to October 1996, Mr. Mongiello served as Chief Executive Officer of        
OnStream. He currently serves on the board of directors of Avici Systems, Inc., 
a developer of routers that transmit data over fiber optic networks. Mr.        
Mongiello attended Lowell University and received an MBA from Stanford          
University.                                                                     

Peter T. Morris has served as a director of MAYAN since August 1998. Mr.  
Morris been a general partner of New Enterprise Associates, a venture capital   
investment firm, since 1992. He currently serves on the board of directors of   
Accelerated Networks, Gadzoox Networks, Inc., a storage area network company,   
iAsiaWorks, Inc., an Internet data center and hosting services provider,        
Packeteer, Inc., a provider of Internet application infrastructure systems, and 
Virata Corporation, a provider of communications processors to DSL equipment    
manufacturers. Mr. Morris received a BS in Electrical Engineering and an MBA    
from Stanford University.                                                       

Certain of MAYAN's directors are elected to its board pursuant to a voting
agreement. See "Description of Capital Stock and Comparison of Shareholder      
Rights."                                                                        

Board Committees                                                                

  Compensation Committee. MAYAN's compensation committee currently consists of
Messrs. Mongiello and Morris. It makes recommendations concerning salaries,     
stock options, incentives and other forms of compensation for directors,        
officers and other employees of MAYAN. The compensation committee also          
administers MAYAN's stock options plans.                                        

Audit Committee. MAYAN's audit committee currently consists of Messrs.    
Edrington and Krausz. It reviews MAYAN's annual audit and supervises            
independent auditors that review MAYAN's internal accounting procedures and     
financial management practices.                                                 

Compensation of Directors                                                       

 MAYAN directors do not receive cash for services they provide as directors.
MAYAN's 1998 Stock Option/Stock Issuance Plan provides for grants of options to 
purchase common stock to MAYAN's directors. In addition, MAYAN directors are    
reimbursed for expenses incurred in connection with attending board meetings.   

On December 14, 1999, MAYAN granted Mr. Thomas Edrington an option to     
purchase 50,000 shares of MAYAN common stock at an exercise price of $0.50 per  
share under the MAYAN 1998 Stock Option/Stock Issuance Plan.                    

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Compensation Committee Interlocks and Insider Participation                     

  MAYAN's entire board of directors is responsible for reviewing and approving
the compensation and benefits of MAYAN's executive officers and administering   
MAYAN's stock plans. No executive officer of MAYAN serves as a member of the    
board of directors or compensation committee of any entity that has one or more 
officers serving as a member of MAYAN's board of directors.                     

Executive Compensation                                                          

 The following table presents information concerning all compensation earned
during the year ended June 30, 2000 by MAYAN's Chief Executive Officer and the  
four other most highly compensated executive officers during the year ended     
June 30, 2000 whose combined salary and bonus exceeded $100,000 for services    
rendered during the fiscal year. These executive officers are referred to below 
as the "Named Executive Officers."                                              

The compensation set forth in the table below does not include medical,   
group life or other benefits that are available to all of MAYAN's salaried      
employees, and perquisites and other benefits, securities or property that do   
not exceed the lesser of $50,000 or 10% of the person's salary and bonus shown  
in the table.                                                                   

Summary Compensation Table

                                                                [Download Table]

                            Annual Compensation       All Other Compensation   
                         ------------------------- ----------------------------
                                                   Securities                  
   Name And Principal                              Underlying       Other      
        Position         Year Salary ($) Bonus ($) Options (#) Compensation ($)
   ------------------    ---- ---------- --------- ----------- ----------------
                                                                               
Daniel J. Gatti......... 2000  250,000    88,159     600,000           --      
 President, Director and                                                       
  former Chief Executive                                                       
  Officer(1)                                                                   

Daniel W. Brown......... 2000  146,667    36,667     300,000           --      
 Vice President of                                                             
  Product Marketing                                                            

Julian C. Thomson....... 2000  175,000       --          --            --      
 Former Vice President                                                         
  of Technology(2)                                                             

Robert A. Hernandez..... 2000  175,000       --      350,000           --      
 Former Vice President                                                         
  of Operations(3)                                                             

Andrew M. Lovit......... 2000  137,500       --      350,000        91,667(4)  
 Former Vice President                                                         
  of Worldwide Sales(5)                                                        

--------                                                                        
(1)  Esmond Goei was appointed as the Chief Executive Officer of MAYAN in March 
2001.                                                                 

(2)  Mr. Thomson's service as Vice President of Technology and employment with  
MAYAN ceased in March 2001.                                           

(3)  Sullivan Bookataub was appointed as Vice President of Operations of MAYAN  
  in March 2001 and succeeded Mr. Hernandez in that position at that time.

(4)  Consists of a non-recoverable draw on commissions.                         

(5)  James Linkous was appointed as Senior Vice President of Worldwide Sales of 
   MAYAN in March 2001 and Mr. Lovit's employment with MAYAN ceased in March
2001.                                                                 

Option Grants in Last Fiscal Year                                               

The following table sets forth information with respect to stock options  
granted to each of the Named Executive Officers in 2000. MAYAN granted options  
to purchase up to a total of 5,039,800 shares to employees during the year, and 
the table's percentage column shows how much of that total went to the Named    
Executive Officers. No stock appreciation rights were granted to the Named      
Executive Officers during 2000.                                                 

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The table includes the potential realizable value over the 10-year term of
the options, based on assumed rates of stock price appreciation of 5% and 10%,  
compounded annually. The potential realizable value is calculated based on the  
initial exercise price assuming the aggregate exercise price on the date of     
grant appreciates at the indicated rate for the entire term of the option and   
that the option is exercised and sold on the last day of its term at the        
appreciated price. All options listed have a term of 10 years. The stock price  
appreciation rates of 5% and 10% are assumed pursuant to the rules of the       
Securities and Exchange Commission. MAYAN can give no assurance that the actual 
stock price will appreciate over the 10-year option term at the assumed 5% and  
10% levels or at any other defined level. Actual gains, if any, on stock option 
exercises will be dependent on the future performance of MAYAN's common stock.  
Unless the market price of the common stock appreciates over the option term,   
no value will be realized from the option grants made to the Named Executive    
Officers.                                                                       

The option grants to the Named Executive Officers were made under MAYAN's 
1998 Stock Option/Stock Issuance Plan. The exercise price for each option grant 
is equal to the fair market value of MAYAN's common stock on the grant, as      
determined in good faith by the board of directors. All options were            
immediately exercisable in full, but MAYAN can buy back any shares purchased    
under those options, at the exercise price paid per share, to the extent the    
shares are not vested when the officer leaves MAYAN. MAYAN's repurchase rights  
will lapse on an accelerated basis under certain conditions in conjunction with 
a change of control. See "Management of MAYAN--Benefit Plans."                  

Option Grants in Fiscal 2000* 

                                                        [Enlarge/Download Table]

                                                                                      Potential         
                                                                                     Realizable         
                                                                                      Value at          
                                                                                   Assumed Annual       
                                                                                   Rates of Stock       
                                                                                        Price           
                         Number of  Percent of                                      Appreciation        
                         Securities   Total                            Fair Market for Option Term      
                         Underlying  Options   Exercise                   Value          ($)            
                          Options   Granted in Price Per  Expiration   at Date of  ------------------   
   Name                  Granted(#)    2000    Share ($)     Date       Grant ($)     5%        10%     
   ----                  ---------- ---------- ---------  ----------   ----------- -------    -------   
                                                                                                        
Daniel J. Gatti.........  600,000     11.56%     0.50      12/13/09       0.50     188,668    478,122   
Daniel W. Brown.........  300,000      5.78%         (1)           (2)        (3)         (4)        (5)
Julian C. Thomson.......      --        --        --            --         --          --         --    
Robert A. Hernandez.....  350,000      6.74%     0.17       7/12/09       0.17      37,419     94,827   
Andrew M. Lovit.........  350,000      6.74%     0.17       8/23/09       0.17      37,419     94,827   

--------                                                                        
*   If the merger is effected, these options will be converted into options to
purchase approximately    times the number of shares indicated on this
    table, and the exercise price will be reduced by approximately    , before
giving effect to the reverse stock split.                             

(1)  Mr. Brown was granted 200,000 stock options in August 1999 with an         
    exercise price of $0.17 per share and he was granted 100,000 stock options
in December 1999 with an exercise of $0.50 per share.                 

(2)  The stock options granted to Mr. Brown in August 1999 have an expiration   
date of August 23, 2009 and the stock options granted to Mr. Brown in 
December 1999 have an expiration date of December 13, 2009.           

(3)  The fair market value of the stock options granted to Mr. Brown in August  
 1999 was $0.17 per share and the fair market value of the stock options
granted to Mr. Brown in December 1999 was $0.50 per share.            

(4)  The potential realizable gain for the stock options granted to Mr. Brown   
   in August 1999 is $21,382 and the potential realizable gain for the stock
options granted to Mr. Brown in December 1999 is $31,444.             

(5)  The potential realizable gain for the stock options granted to Mr. Brown   
   in August 1999 is $54,187 and the potential realizable gain for the stock
options granted to Mr. Brown in December 1999 is $79,687.             

MAYAN granted options from January 1, 2001 to March 31, 2001 to its       
executive officers to purchase up to a total of 633,333 shares of its common    
stock. This amount includes a grant of 250,000 shares each to Sullivan J.       
Bookataub and James B. Linkous, respectively, on March 13, 2001 at an exercise  
price of $0.75 per share and a grant of 133,333 shares to Esmond T. Goei on     
March 13, 2001 at an exercise price of $0.75 per share.                         

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Option Exercises in Last Fiscal Year                                            

The following table sets forth the number of shares the Named Executive   
Officers purchased in connection with option exercises during the 2000 fiscal   
year and the value they realized on those exercises. None of the Named          
Executive Officers held any unexercised options at the end of the 2000 fiscal   
year or exercised any stock appreciation rights during 2000, and none held any  
stock appreciation rights at the end of the year.                               

  The value realized is based on the fair market value of MAYAN's common stock
on the date of exercise, minus the exercise price payable for the shares. The   
fair market value was determined in good faith by the Board. The exercise price 
for each grant equaled the fair market value on the date of exercise, so the    
Named Executive Officers who exercised did not realize any value on the         
exercises.                                                                      

                                                        [Enlarge/Download Table]

                                                   # of Securities                               
                                               Underlying Unexercised     Value of Unexercised   
                          Number of            Options/SARs at Fiscal   In-the-Money Options/SARs
                           Shares                   Year End (2)         at Fiscal Year End (2)  
                          Acquired    Value   ------------------------- -------------------------
   Name                  on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
   ----                  ----------- -------- ----------- ------------- ----------- -------------
                                                                                                 
Daniel J. Gatti.........   600,000     --         --           --           --           --      
Daniel W. Brown.........   300,000     --         --           --           --           --      
Julian C. Thomson.......       --      --         --           --           --           --      
Robert A. Hernandez.....   350,000     --         --           --           --           --      
Andrew M. Lovit.........   350,000     --         --           --           --           --      

Benefit Plans                                                                   

1998 Stock Option/Stock Issuance Plan                                         

  MAYAN's 1998 Stock Option/Stock Issuance Plan became effective upon adoption
by its board and approval by its shareholders in December 1998. MAYAN has       
authorized 12,985,937 shares of common stock for issuance under the plan, and   
3,075,446 options were outstanding under the plan as of March 31, 2001.         

  The 1998 Stock Option/Stock Issuance Plan provides for the granting to MAYAN
employees of incentive stock options at an exercise price of not less than 100% 
of the fair market value of the common stock on the option grant date and to    
employees, non-employee members of the board and consultants who provide        
services to MAYAN, non-statutory stock options to purchase shares of MAYAN      
common stock at an exercise price of not less than 85% of the fair market value 
of the common stock on the grant date. Options may be exercised for unvested    
shares which may be repurchased by MAYAN when the optionee ceases to provide    
services to MAYAN. Options may be exercised for cash and through the issuance   
of full recourse promissory notes. In the event that MAYAN is acquired by       
merger or asset sale, the shares subject to each outstanding option under the   
1998 Stock Option/Stock Issuance Plan which are not assumed or continued by the 
successor corporation shall automatically vest in full, so that immediately     
prior to the effective time of that transaction, each option shall become fully 
exercisable for all of the shares of common stock subject to that option at     
that time.                                                                      

The 1998 Stock Option/Issuance Plan also enables MAYAN to issue to        
employees, non-employee members of MAYAN's board and consultants who provide    
services to MAYAN, shares of common stock either directly, through the purchase 
of shares at a price not less than 85% of their fair market value on the issue  
date or as a bonus for services.                                                

Cancellation and Regrant of Options. The Plan Administrator has the       
authority to effect the cancellation of any or all options outstanding under    
the 1998 Stock Option/Stock Issuance Plan and to grant in substitution therefor 
new options covering the same or different numbers of shares of common stock    
but with an exercise price per share based upon the fair market value of the    
common stock on the new grant date.                                             

On March 13, 2001, MAYAN cancelled options to purchase 110,500 shares of  
MAYAN's common stock previously granted to certain employees. These options had 
an original exercise price of $5.30. MAYAN replaced the cancelled options with  
new options for the same number of shares but with an exercise price of         

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$0.75. The new options granted in replacement of the original options will      
become exercisable for those option shares in one or more installments over the 
optionee's period of continued service, with each such installment to vest on   
the same vesting date in effect for that installment under the cancelled        
higher-priced option. Under the FASB Interpretation No. 44 "Accounting for      
Certain Transactions Involving Stock Compensation," and Interpretation of APB   
No. 25, these options will be accounted for as variable grants. Accordingly,    
MAYAN will be required to recognize compensation expense equal to the intrinsic 
value, the difference between the exercise price of $0.75 and the fair value of 
MAYAN's common stock until the options are exercised, forfeited, or expire      
unexercised.                                                                    

401(k) Plan                                                                   

  MAYAN sponsors a defined contribution plan intended to qualify under Section
401 of the Internal Revenue Code, or a 401(k) plan. Employees who are at least  
21 years old are generally eligible to participate. Participants may make pre-  
tax contributions to the plan of up to 20% of their eligible earnings, subject  
to a statutory prescribed annual limit. Each participant is fully vested in his 
or her contributions and the investment earnings. Although MAYAN may make       
discretionary contributions to the 401(k) plan, none have been made to date.    
Contributions by the participants to the plan, and the income earned on these   
contributions, are generally not taxable to the participants until withdrawn.   
Participant contributions are held in trust as required by law. Individual      
participants may direct the trustee to invest their accounts in authorized      
investment alternatives.                                                        

Employment Contracts, Termination of Employment Arrangements and Change in      
Control Arrangements                                                            

Except for an employment agreement with Mr. Gatti and Esmond Goei, MAYAN  
does not currently have any employment agreements or severance arrangements in  
effect for any of its executive officers. MAYAN provides incentives such as     
salary, cash bonuses and option grants, which typically vest over a four-year   
period, to attract and retain qualified executives. Mr. Gatti's employment      
agreement provides that his employment is terminable at will, but if he is      
terminated for any reason other than for cause, he will receive six months of   
severance pay based on his salary for that year. Mr. Goei's employment          
agreement is effective for one year following February 7, 2001 and provides     
that if he is terminated for any reason other than for cause, he will receive   
the greater of the salary payable to the conclusion of the agreement or six     
months pay in lieu of severance.                                                

In addition, if any executive officer is terminated, or his role is       
materially diminished, within 18 months of a change in control or acquisition   
of MAYAN, all of his unvested options will vest in full. Each of the stock      
options issued to MAYAN's directors, Messrs. Mongiello and Edrington, contain   
similar change of control provisions.                                           

Limitation of Liability and Indemnification                                     

 MAYAN's bylaws provide that MAYAN will indemnify its directors and officers
to the fullest extent permitted by California law. MAYAN is also empowered      
under its articles of incorporation to enter into indemnification agreements    
with its directors, officers, employees and agents. Pursuant to this provision, 
MAYAN has entered into an indemnification agreement with each of its directors  
and officers. MAYAN's bylaws also permit it to purchase insurance on behalf of  
any person that MAYAN is required or permitted to indemnify.                    

In addition, MAYAN's articles of incorporation provide that to the fullest
extent permitted by California law, the liability of MAYAN's directors for      
monetary damages will be eliminated to the fullest extent permissible. This     
provision in MAYAN's articles of incorporation does not eliminate the duty of   
care, and in appropriate circumstances equitable remedies, including an         
injunction or other forms of non-monetary relief, would remain available under  
California law. Each director will continue to be subject to liability for:     

.  acts or omissions involving intentional misconduct or knowing and        
culpable violations of law;                                           

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.  acts or omissions that the director believes to be contrary to MAYAN's   
best interests or its shareholders' best interests or that involve the
absence of good faith on the part of the director;                    

.  any transaction from which the director derived an improper personal     
benefit;                                                              

.  acts or omissions that show a reckless disregard for the directors' duty 
 to MAYAN or its shareholders when the director was aware or should have
been aware of a risk of serious injury to MAYAN or its shareholders;  

.  acts or omissions that constitute an unexcused pattern of inattention    
that amounts to an abdication of the director's duty to MAYAN or its  
shareholders;                                                         

.  improper transactions between the director and MAYAN;                    

.  improper distributions to shareholders and loans to directors and        
officers;                                                             

.  any act or omission occurring prior to the time the indemnification      
became effective; or                                                  

.  acts or omissions by the director also serving as an officer.            

 This provision also does not affect a director's responsibilities under any
other laws, including the federal securities laws or state or federal           
environmental laws.                                                             

  Except as noted in "Legal Proceedings," there is no litigation or proceeding
involving directors or officers where indemnification will be required or       
permitted. MAYAN is not aware of any threatened litigation or proceeding that   
may result in a claim for that indemnification.                                 

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS OF MAYAN 

Since MAYAN's inception in July 1997, MAYAN has been a party to the       
transactions listed below in which the amount involved exceeded $60,000 and in  
which the following persons had a direct or indirect material interest:         

.  any of MAYAN's directors or executive officers;                          

.  any nominee for election as one of MAYAN's directors;                    

.  any person who owns beneficially more than five percent of MAYAN's       
common stock or preferred stock; or                                   

.  any member of the immediate family of any of the foregoing persons.      

Common Stock Issuances                                                          

The executive officers, directors and employees of MAYAN can exercise     
options prior to the date upon which the options vest. However, exercised       
shares are subject to a right of repurchase by MAYAN until the shares have      
vested. As of March 31, 2001, MAYAN's executive officers and directors          
exercised options to purchase an aggregate of 3,408,000 shares of common stock  
at a weighted average exercise price of approximately $0.28 per share.          

Preferred Stock Issuances                                                       

Since MAYAN's inception in July 1997, MAYAN has issued and sold shares of 
convertible preferred stock to the following persons and entities who are       
MAYAN's executive officers, directors or principal shareholders. For more       
detail on each of these purchasers, see "Principal Shareholders of MAYAN."      

                                                                [Download Table]

                          Series A    Series B     Series C      Series D     
                          Preferred   Preferred    Preferred     Preferred    
     Investor               Stock       Stock        Stock         Stock      
     --------             ---------   ---------    ---------     ---------    
                                                                              
Esmond T. Goei..........   62,500(1)        --           --            --     
Daniel J. Gatti.........   62,500(2)        --         8,982        48,078(3) 
Steven M. Krausz........      --      3,921,568(4) 1,916,167(5)    961,538(6) 
James Mongiello.........      --            --     4,491,018(7)    980,769(8) 
Peter T. Morris.........      --      3,921,569(9) 1,916,168(10) 1,923,077(11)
New Enterprise                                                                
 Associates.............      --      3,921,569(9) 1,916,168(10) 1,923,077(11)
U.S. Venture Partners...      --      3,921,568(4) 1,916,167(5)    961,538(6) 
Brentwood Venture                                                             
 Capital................      --            --     4,491,018(7)    961,538(12)
Oak Investment                                                                
 Partners...............      --            --     3,353,293(13)   961,538(14)
London Pacific Assurance                                                      
 Limited................      --            --           --      5,052,580(15)

--------                                                                        
(1) Mr. Goei currently owns 2,500 of these shares. The balance was            
transferred.                                                          

(2) Represents the following shares beneficially owned by Mr. Gatti's         
brothers: 25,000 shares held by Robert Gatti and 37,500 shares held by
Walter J. Gatti Trustee.                                              

(3) Includes the following shares beneficially owned by Mr. Gatti's brothers: 
18,029 shares held by Walter J. Gatti and 18,029 shares held by Robert
Gatti.                                                                

(4) Represents 3,529,412 shares held by U.S. Venture Partners V, L.P., 196,078
shares held by USVP V International, L.P., 109,804 shares held by 2180
Associates Fund V, L.P. and 86,274 shares held by USVP V Entrepreneur 
Partners, L.P.                                                        

(5) Represents 1,724,550 shares held by U.S. Venture Partners V, L.P., 95,808 
shares held by USVP International, L.P., 53,653 shares held by 2180   
Associates Fund V, L.P. and 42,156 shares held by USVP V Entrepreneur 
Partners, L.P.                                                        

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(6)  Represents 865,384 shares held by U.S. Venture Partners V, L.P., 48,077  
 shares held by USVP V International, L.P., 26,923 shares held by 2180
 Associates Fund V, L.P. and 21,154 shares held by USVP V Entrepreneur
Partners, L.P.                                                      

(7)  Represents 4,401,198 shares held by Brentwood Associates IX, L.P. and    
89,820 shares held by Brentwood Affiliates Fund II, L.P.            

(8)  Includes 942,307 shares held by Brentwood Associates IX, L.P. and 19,231 
shares held by Brentwood Affiliates Fund II, L.P.                   

(9)  Represents 3,857,844 shares held by New Enterprise Associates VII, L.P., 
  58,823 shares held by New Enterprise Associates President's Fund, L.P.
  and 4,902 shares held by New Enterprise Associates Ventures 1998, L.P.

(10)  Represents 1,892,216 shares held by New Enterprise Associates VIII, L.P.  
 and 23,952 shares held by New Enterprise Associates President's Fund,
L.P.                                                                

(11)  Represents 1,923,077 shares held by New Enterprise Associates VIII, L.P.  

(12)  Represents 942,307 shares held by Brentwood Associates IX, L.P. and       
19,231 shares held by Brentwood Affiliates Fund II, L.P.            

(13)  Represents 3,289,580 shares held by Oak Associates VIII, LLC and 63,713   
shares held by Oak VII Affiliates Fund, Limited Partnership.        

(14)  Represents 943,269 shares held by Oak Investment Partners VIII, L.P. and  
18,269 shares held by Oak VIII Affiliates Fund, L.P.                

(15)  Represents shares transferred from London Pacific Assurance Limited to an 
affiliated subsidiary.                                              

  Series A Financing. Between February and June 1998 MAYAN issued an aggregate
of 1,907,500 shares of Series A preferred stock to various investors, including 
one of MAYAN's directors, co-founder and Chief Executive Officer, Esmond T.     
Goei, at a purchase price of $0.80 per share.                                   

Series B Financing. In August 1998, MAYAN issued an aggregate of 7,843,137
shares of Series B preferred stock to various investors including entities      
affiliated with New Enterprise Associates and U.S. Venture Partners at a        
purchase price of $1.02 per share.                                              

Series C Financing. In April 1999 MAYAN issued an aggregate of 11,826,346 
shares of its Series C preferred stock to various investors including entities  
affiliated with New Enterprise Associates, U.S. Venture Partners, Oak           
Investment Partners and Brentwood Venture Capital at a purchase price of $1.67  
per share.                                                                      

Series D Financing. From October 1999 through April 2000, MAYAN issued an 
aggregate of 14,423,077 shares of Series D preferred stock to various           
investors, including one of its directors, James Mongiello, and entities        
affiliated with New Enterprise Associates, U.S. Venture Partners, Oak           
Investment Partners and Brentwood Venture Capital at a purchase price of $4.16  
per share.                                                                      

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Loans to Officers                                                               

 From inception to March 31, 2001, MAYAN has lent the following officers and
former officers money in exchange for promissory notes carrying the following   
terms:                                                                          

                                                                [Download Table]

                                                Loan     Due                 
  Officer                                    Amount ($) Date     Interest (%)
  -------                                    ---------- -----    ------------
                                                                             
Alan R. Brown...............................   70,000   12/04        5.98    
Andrew M. Lovit.............................  108,000        (1)     6.00    
                                              110,000        (2)     5.00    
Julian C. Thomson...........................   70,000        (3)     6.00    
                                               30,000        (4)     5.00    
                                               48,000        (5)     5.98    
Kevin W. Williams...........................   40,000        (6)     5.98    
Daniel J. Gatti.............................   11,000        (7)      n/a    

--------                                                                        
(1) Balance due totaling $108,000 was forgiven over a period of time ending in  
May 2001.                                                               

(2) Repaid in May 2001.                                                         

(3) Balance due totaling $9,215.76 was forgiven over a period of time ending in 
July 2000.                                                              

(4) Loan was forgiven in July 2000.                                             

(5) Loan was forgiven in July 2000.                                             

(6) Balance due totaling $22,006 was forgiven over a period of time ending in   
March 2001.                                                             

(7) Balance due totaling $3,784 was forgiven over a period of time ending in    
June 1999.                                                              

  In connection with option exercises, the following officers, former officers
and directors delivered five-year full recourse promissory notes bearing an     
interest rate of 5.98%, compounded annually, with the following terms. The      
indebtedness is secured by the stock purchased on the exercise of the options.  

                                                                [Download Table]

                                                              Due     Loan   
   Name                                                      Date  Amount ($)
   ----                                                      ----- ----------
                                                                             
Daniel W. Brown............................................. 10/04   34,000  
                                                              3/05   50,000  

Daniel J. Gatti............................................. 10/04  100,000  
                                                              3/05  300,000  

Robert A. Hernandez......................................... 10/04   59,500  

Farooq M. Raza.............................................. 10/04   18,750  

John R. Tingleff............................................ 10/04   44,600  
                                                              9/05   75,000  

Andrew White................................................ 12/04   34,000  

Alan R. Brown............................................... 10/05  247,500  

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PRINCIPAL SHAREHOLDERS OF MAYAN 

  The following table sets forth information regarding beneficial ownership of
MAYAN's common stock as of March 31, 2001, by:                                  

. each person who owns beneficially more than 5% of MAYAN's common stock or 
preferred stock;                                                        

. each of MAYAN's directors and the Named Executive Officers; and           

. all of MAYAN's directors and executive officers as a group.               

This table assumes conversion of all the outstanding preferred stock into 
common stock effective at the closing of the merger.                            

                                                                [Download Table]

                                                     Total           Percent of
Beneficial Owner                                   Shares(1)         Total (%) 
----------------                                   ---------         ----------
                                                                               
Esmond T. Goei.................................... 1,835,670(2)          3.8   
Daniel J. Gatti................................... 2,121,002(3)          4.6   
Daniel W. Brown...................................   310,000(4)            *   
Julian C. Thomson.................................   175,000               *   
Robert A. Hernandez...............................   356,010(5)            *   
Andrew M. Lovit...................................   354,808(6)            *   
Thomas Edrington..................................   110,000(7)            *   
Steven M. Krausz.................................. 6,799,273(8)         14.6   
 2180 Sand Hill Road                                                           
 Suite 300                                                                     
 Menlo Park, CA 94025                                                          
James Mongiello................................... 5,552,556(9),(10)    11.9   
 3000 Sand Hill Road                                                           
 Bldg. 1, Suite 260                                                            
 Menlo Park, CA 94025                                                          
Peter T. Morris................................... 7,760,814(11)        16.7   
 2490 Sand Hill Road                                                           
 Menlo Park, CA 94025                                                          
New Enterprise Associates......................... 7,760,814(11)        16.7   
 2490 Sand Hill Road                                                           
 Menlo Park, CA 94025                                                          
U.S. Venture Partners............................. 6,799,273(8)         14.6   
 2180 Sand Hill Road                                                           
 Suite 300                                                                     
 Menlo Park, CA 94025                                                          
Brentwood Venture Capital......................... 5,452,556(12)        11.7   
 3000 Sand Hill Road                                                           
 Bldg. 1, Suite 260                                                            
 Menlo Park, CA 94025                                                          
Oak Investment Partners........................... 4,314,831(13)         9.3   
 525 University Avenue                                                         
 Suite 1300                                                                    
 Palo Alto, CA 94301                                                           

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                                                                [Download Table]
                                                                               
London Pacific Assurance Limited...........................  5,052,580(14) 10.8
 Minden House                                                                  
 6 Minden Place                                                                
 St. Heiler                                                                    
 Jersey, Channel Islands                                                       
Directors and Executive Officers as a group (13 persons)... 25,375,133(15) 52.9

--------                                                                        
*  Less than one percent.                                                   

Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to those shares, subject to  
community property laws where applicable. Shares not outstanding but  
   deemed beneficially owned by virtue of the right of a person or member of
a group to acquire them within 60 days are treated as outstanding only
when determining the amount and percent owned by that person or group.
    Each shareholder's percentage of ownership in the following table is based
  on 46,606,470 shares of stock outstanding as of March 31, 2001, assuming
the conversion of all of MAYAN's outstanding shares of preferred stock
   into one share of common stock. Unless otherwise indicated, the principal
address of each of the shareholders below is c/o MAYAN Networks       
Corporation, 2115 O'Nel Drive, San Jose, California 95135.            

(1) MAYAN has issued shares of Series A, Series B, Series C and Series D      
  preferred stock all of which is required to convert into common stock at
the effective time of the merger.                                     

(2) Includes 2,500 shares of Series A Preferred Stock. Also includes 180,000  
    shares of common stock held by Evelyn Goei, Mr. Goei's wife, 26,668 shares
 of common stock held by Estella Fung, Trustee of the AAA Goei Trust fbo
Angela Lynn Goei, 26,666 shares of common stock held by Estella Fung, 
Trustee of the AAA Goei Trust fbo Amanda Susan Goei, 26,666 shares of 
common stock held by Estella Fung, Trustee of the AAA Goei Trust fbo  
Andrew Esmond Goei, includes 250,000 shares of common stock held by   
Archangel Capital Investments, L.P. Also includes 1,208,170 shares of 
common stock issuable upon the exercise of stock options which are    
exercisable within 60 days of March 31, 2001.                         

(3) Includes 8,982 shares of Series C preferred stock and 12,020 shares of    
 Series D preferred stock. Also, includes 741,666 shares of common stock
which are subject to a right of repurchase by MAYAN.                  

(4) Includes 183,541 shares of common stock which are subject to a right of   
   repurchase by MAYAN. Also includes 10,000 shares of common stock issuable
    upon the exercise of stock options which are exercisable within 60 days of
March 31, 2001.                                                       

(5) Includes 6,010 shares of Series D preferred stock. Also includes 189,583  
shares of common stock which are subject to a right of repurchase by  
MAYAN.                                                                

(6) Includes 4,808 shares of Series D preferred stock. Also includes 211,458  
shares of common stock which are subject to a right of repurchase by  
MAYAN.                                                                

(7) Represents 110,000 shares of common stock issuable upon the exercise of   
stock options which are exercisable within 60 days of March 31, 2001. 

(8) Represents 6,119,346 shares of preferred stock held by U.S. Venture       
Partners V, L.P., 291,886 shares of preferred stock held by USVP V    
International, L.P., 190,380 shares of preferred stock held by        
2180 Associates Fund V, L.P., 48,077 shares of preferred stock held by
  USVP International V, L.P. and 149,584 shares of preferred stock held by
USVP V Entrepreneur Partners, L.P. Mr. Krausz disclaims beneficial    
 ownership in such shares except to the extent of his pecuniary interest
therein.                                                              

(9) Includes 52,083 shares of common stock which are subject to a right of    
repurchase by MAYAN.                                                  

(10) Represents 5,343,505 shares of preferred stock held by Brentwood           
Associates IX, L.P. and 109,051 shares of preferred stock held by     
Brentwood Affiliates Fund II, L.P. Mr. Mongiello disclaims beneficial 
 ownership in such shares except to the extent of his pecuniary interest
therein.                                                              

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(11) Represents 3,857,844 shares of preferred stock held by New Enterprise      
Associates VII, L.P., 82,775 shares of preferred stock held by New    
 Enterprise Associates President's Fund, L.P., 4,902 shares of preferred
   stock held by New Enterprise Associates Ventures 1998, L.P. and 3,815,293
    shares of preferred stock held by New Enterprise Associates VIII, L.P. Mr.
   Morris disclaims beneficial ownership in such shares except to the extent
of his pecuniary interest therein.                                    

(12) Represents 5,343,505 shares of preferred stock held by Brentwood           
Associates IX, L.P. and 109,051 shares of preferred stock held by     
Brentwood Affiliates Fund II, L.P.                                    

(13) Represents 3,289,580 shares of preferred stock held by Oak Associates      
  VIII, LLC, 63,713 shares of preferred stock held by Oak VIII Affiliates,
LLC, 943,269 shares of preferred stock held by Oak Investment Partners
VIII, L.P. and 18,269 shares of preferred stock held by Oak VIII      
Affiliates Fund, L.P.                                                 

(14) Includes 5,052,580 shares of preferred stock transferred from London       
Pacific Assurance Limited to affiliated subsidiary.                   

(15) Includes 1,378,331 shares of common stock which are subject of repurchase  
by MAYAN. Also includes 1,328,170 shares which are issuable upon the  
 exercise of stock options exercisable within 60 days of March 31, 2001.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MAYAN

The following discussion and analysis of MAYAN's financial condition and  
results of operations should be read in conjunction with "Selected Consolidated 
Financial Data" and MAYAN's consolidated financial statements and notes thereto 
appearing elsewhere in this prospectus. This discussion and analysis contains   
forward-looking statements that involve risks and uncertainties. MAYAN's actual 
results may differ materially from those anticipated in these forward-looking   
statements as a result of certain factors, including, but not limited to, those 
set forth under "Risk Factors--Risks Related to MAYAN" and elsewhere in this    
prospectus.                                                                     

Overview                                                                        

MAYAN Networks Corporation is a development stage company, and its limited
operating history makes it difficult to evaluate its business and prospects.    
MAYAN was incorporated in July 1997 and has not yet sold any products or        
realized any revenues. MAYAN's business and ability to generate revenues or     
realize earnings is unproven. MAYAN has only a limited operating history and    
limited historical financial data upon which you may evaluate its business and  
prospects. To date, MAYAN has focused its efforts on conducting research and    
development of the Unifier SMX, its principal product.                          

  From MAYAN's inception through March 31, 2001, MAYAN has incurred cumulative
net losses of approximately $99.4 million. MAYAN expects to continue to incur   
substantial operating losses and to experience substantial negative cash flow   
as it expands its business.                                                     

MAYAN's business is subject to significant risks. The Unifier SMX is      
currently MAYAN's only product and it is still undergoing testing and           
development. MAYAN's revenues are entirely dependent on the commercial success  
of the Unifier SMX. MAYAN has not completed development of this product, has    
only tested it on a limited basis and has not sold it to anyone. MAYAN must     
further develop the Unifier SMX, as well as perform additional testing, before  
MAYAN will be able to realize revenues from sales of the product. MAYAN expects 
that to gain market acceptance, the Unifier SMX must satisfy tests and          
certifications required by its potential customers, over which MAYAN has no     
control. MAYAN cannot guarantee that its development and marketing efforts will 
result in a commercially viable product, that the Unifier SMX will be           
interoperable with current or future telecommunications networks systems or     
that customers will purchase that product as it is currently configured. MAYAN  
also cannot guarantee that the development of the Unifier SMX will not take     
longer than planned, or that having to rework components of the Unifier SMX     
will not delay delivery of the Unifier SMX to MAYAN's prospective customers.    

 On March 28, 2001 the board of directors approved and MAYAN entered into an
agreement and plan of merger, or the Merger Agreement, with Ariel. As a result  
of the Ariel Merger, MAYAN will merge with an into Ariel and the shareholders   
of MAYAN will become stockholders of Ariel. Pursuant to the Merger Agreement,   
Ariel will effect a reverse stock split and issue additional shares to MAYAN    
shareholders, option holders and warrant holders such that MAYAN shareholders,  
option holders and warrant holders will control approximately 90% of the new    
entity's voting stock. For the Ariel Merger to be approved, the holders of a    
majority of the outstanding shares of MAYAN's common stock and the holders of a 
majority of the outstanding shares of MAYAN's preferred stock must approve the  
Merger Agreement. Additionally, the holders of MAYAN's preferred stock must     
voluntarily convert their stock into common stock pursuant to MAYAN's Amended   
and Restated Articles of Incorporation immediately prior to the closing of the  
Ariel Merger.                                                                   

The Ariel Merger will be accounted for under the purchase method. Because 
MAYAN will own approximately 90% of the common stock of Ariel (on a diluted     
basis) after the Ariel Merger, the Ariel Merger will be accounted for as a      
reverse acquisition which results in MAYAN being the acquirer of Ariel for      
accounting purposes.                                                            

  The Merger Agreement also requires MAYAN to provide up to $2 million in debt
financing to Ariel under a Promissory Note on an as-needed basis until the      
transaction is consummated or otherwise terminated. In the                      

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event MAYAN chooses to terminate the Merger Agreement due to a superior offer,  
the Promissory Note becomes a term note with any principal and accrued interest 
payable on the one year anniversary of the termination. Should the Merger       
Agreement otherwise terminate, amounts due on the Note would be due and payable 
upon termination.                                                               

Ariel must maintain certain representations and warranties and not be in  
breach of the covenants of the Merger Agreement to borrow funds against the     
Note. The Note has an annual interest rate of 8% and may be secured by          
subordinated security agreements on Ariel's tangible assets and intellectual    
property.                                                                       

As of March 31, 2001 MAYAN had funded $300,000 and this amount is recorded
in other assets in the accompanying balance sheet. The remaining $1.7 million   
has been provided under the note subsequent to March 31, 2001.                  

Results of Operations                                                           

Nine Months Ended March 31, 2001 and 2000                                       

Research and Development Expenses. Research and development expenses were 
$24.0 million for the nine months ended March 31, 2001, an increase of 33% from 
$18.0 million for the nine months ended March 31, 2000. Research and            
development represented 56% and 80% of the total operating expenses for the     
nine months ended March 31, 2001 and 2000, respectively. The increase of $5.9   
million in is primarily due to the expansion of MAYAN's research and            
development department, and to the increase in engineering and prototype        
expenses related to the design, development, and testing of the Unifier SMX     
product.                                                                        

  Sales and Marketing Expenses. Sales and marketing expenses were $7.4 million
for the nine months ended March 31, 2001, an increase of 255% from $2.1 million 
for the nine months ended March 31, 2000. Sales and marketing represented 17%   
and 9% of total operating expenses for the nine months ended March 31, 2001 and 
2000, respectively. The increase in sales and marketing expense reflects the    
increase in sales, marketing, and customer service personnel hired in the nine  
months ended March 31, 2001 as compared to the nine months ended March 31,      
2000.                                                                           

General and Administrative Expenses. General and administrative expenses  
were $7.7 million for the nine months ended March 31, 2001, an increase of 274% 
from $2.0 million for the nine months ended March 31, 2000. General and         
administrative expenses represented 18% and 9% of the total operating expenses  
for the nine months ended March 31, 2001 and 2000, respectively. The increase   
in general and administrative expenses reflects the increase in headcount and   
the increase in facilities related costs.                                       

 Amortization of Deferred Stock Compensation. Amortization of deferred stock
compensation expenses were $3.7 million for the nine month period ended March   
31, 2001, or 9% of total operating expenses. There was $363,000 of deferred     
stock compensation in the nine month period ended March 31, 2000. Deferred      
stock compensation relates to options issued to employees with an exercise      
price below the fair value of MAYAN's common stock and options issued to        
advisory board members and contractors with vesting provisions requiring future 
service.                                                                        

Interest Income and Expense. Interest income was $2.8 million for the nine
months ended March 31, 2001 as compared to $1.8 million for the nine months     
ended March 31, 2000. The increase in interest income is related to the higher  
average of cash, cash equivalents and short-term investments held during the    
period due to the cash generated from the $75 million subordinated debt         
offering in October 2000. Interest expense for the nine months ended March 31,  
2001 was $5.9 million as compared to $124,000 for the nine months ended March   
31, 2000. The increase in 2000 was mainly due to interest and accretion of      
redemption premium related to the $75 million convertible subordinated debt     
offering.                                                                       

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Liquidity and Capital Resources                                                 

As of March 31, 2001, MAYAN had cash, cash equivalents and short-term     
investments of $67.2 million as compared to $38.7million as of June 30, 2000.   
The increase in cash, cash equivalents and short term investments was primarily 
due to the completion of the subordinated debt offering in October 2000 which   
has been partially offset by cash used in operating and investing activities of 
approximately $39.8 million.                                                    

MAYAN used $38.3 million of cash in operating activities during the nine  
months ended March 31, 2001, an increase of $17.5 million or 84% over the $20.8 
million used in the nine months ended March 31, 2000. The increase was          
primarily due to an increase in the net loss of $45.8 million as compared to    
$20.9 million for the nine months ended March 31, 2001 and 2000, respectively.  

MAYAN used $1.6 million of cash in investing activities in the nine months
ended March 31, 2001, a decrease of $13.2 million over the $14.8 used in the    
nine months ended March 31, 2000. The decrease was primarily due to the net     
difference between the purchases of investments and maturity of investments for 
the nine months ended March 31, 2001 as compared to the nine months ended March 
31, 2000.                                                                       

  MAYAN generated $70.1 million in cash from financing activities for the nine
months ended March 31, 2001 as compared to $60.3 million for the nine months    
ended March 31, 2000. The cash provided in the nine month period ended March    
31, 2001 was generated from the $75.0 million subordinated debt offering in     
October 2000 and the cash provided in the nine month period ended March 31,     
2000 was primarily generated from the sale of preferred stock.                  

  On May 18, 2001 MAYAN entered into an agreement with a contract manufacturer
related to assembly of MAYAN's products and purchase of the related raw         
materials. Under this agreement, MAYAN will purchased finished products in the  
normal course of business and MAYAN may be obligated to purchase certain excess 
or obsolete materials purchased by the manufacturer at the request of MAYAN. As 
of May 18, 2001, approximately $5.0 million of raw materials is held by the     
manufacturer for possible use in assembling MAYAN's products; however, no       
significant amount of these raw materials is considered excess or obsolete by   
MAYAN.                                                                          

On May 22, 2001, MAYAN made an offer to its current subordinated note     
holders to exchange the $75.0 million of convertible subordinated notes for     
$50.0 million of exchange notes with terms including the following:             

. The exchange notes will bear interest at 7.875% and will be payable in    
2005. The interest is payable semiannually in cash or common stock of   
MAYAN then currently traded on a U.S. national securities exchange. If  
MAYAN pays the interest with its common stock, the shares will be valued
at approximately 90% of the then fair market value.                     

. The exchange notes will be convertible into common stock of MAYAN by the  
holders of the notes at an initial price of $5.00 per share (conversion 
 price-subject to certain adjustments as defined). The exchange notes will
be converted into common stock at the option of MAYAN if: (i) MAYAN's   
common stock becomes publicly traded (such is through the contemplated  
merger with Ariel), (ii) MAYAN registers additional shares of its common
stock to be issued upon conversion of the exchange notes, and (iii)     
MAYAN's common stock price exceeds 200% of the conversion price for at  
least 20 days during a 30 day period. MAYAN may be required to pay      
 additional interest to the holders of the exchange notes upon voluntary a
conversion by the holders prior to November 1, 2003.                    

. MAYAN will have the option to redeem the exchange notes on or after       
November 1, 2003 at an amount ranging from 101.575% to 103.150% of the  
principal amount plus accrued and unpaid interest. In the event of a (i)
change in control of MAYAN or (ii) a delisting of MAYAN's common stock  
(after the Ariel merger or an alternative public merger or complying    
 public equity offering as defined), the holders of the exchange notes may
require MAYAN to repurchase the exchange notes at 105% of the principal 
amount plus accrued and unpaid interest.                                

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. The holders of the exchange notes may require MAYAN to repurchase the     
exchange notes at 37.5% of the principal amount plus accrued and unpaid 
 interest prior to the earlier of (i) 90 days following the effective date
 of a shelf registration statement covering a resale of the exchange notes
and common stock into which the exchange notes are convertible following
the merger with Ariel (or an alternative public merger or complying     
public offering), (ii) the closing of an alternative merger (as defined)
and (iii) January 10, 2002, if at the close of business on December 31, 
 2001 MAYAN has not closed the merger with Ariel (or an alternative public
 merger or complying public equity offering). This repurchase option could
 require MAYAN to make a cash payment of up to approximately $18.8 million
to repay the exchange notes and will result in the exchange notes being 
classified as a current liability in MAYAN's balance sheet until this   
repurchase option expires.                                              

. If MAYAN does not complete the contemplated merger with Ariel by December 
31, 2001, the holders of the exchange notes will have the option to     
change the terms of the exchange notes to terms that are consistent with
the currently outstanding $75.0 million convertible subordinated notes. 

The note exchange, when and if completed, and assuming completion of the  
Ariel merger by December 31, 2001, will result in MAYAN recording a one-time    
extraordinary gain in an amount determined upon completion of these events.     

MAYAN expects to continue to devote substantial capital resources to      
research and development activities, as well as MAYAN's sales, marketing, and   
customer service organizations, the enhancement of its IT infrastructure, the   
acquisition of complementary products, technologies and services and other      
general corporate activities. MAYAN believes that its current cash balances and 
short-term investments will be sufficient to fund its operations for the next   
twelve months, however, MAYAN may delay or eliminate some expenditures and      
scale back operations to ensure MAYAN has sufficient cash to continue to        
implement its strategy. MAYAN also anticipates the need for additional          
financing in the future and MAYAN would seek to raise additional funds through  
a variety of options including borrowings on proceeds from future equity        
financing. There can be no assurance that MAYAN will be able to obtain          
additional financing on acceptable terms, if at all. If adequate funds are not  
available, MAYAN may have to delay or cease product development and             
manufacturing programs or obtain funds through arrangements with third parties  
that may require the relinquishment of rights to certain of its technologies or 
potential products. Consequently, MAYAN's inability to obtain adequate          
financing would have a material adverse affect on its business, condition       
(financial or otherwise) and results of operations.                             

Qualitative and Quantitative Disclosure about Market Risk                       

MAYAN currently plans to market its products in the United States and     
internationally. As a result, its financial results could be affected by        
factors including changes in foreign currency exchange rates or weak economic   
conditions in foreign markets. As no sales have been made to date, MAYAN        
believes there is no material risk exposure.                                    

MAYAN's exposure to market risk for changes in interest rates relates     
primarily to its cash equivalents and short-term investments. MAYAN's interest  
income is sensitive to changes in the general level of U.S. interest rates,     
particularly since the majority of its investments are short-term instruments.  
The investments are classified as available for sale. MAYAN does not use        
derivative financial instruments in its investment portfolio. MAYAN's cash      
investments policy emphasizes liquidity and preservation of principal over      
other portfolio considerations. MAYAN selects investments that maximize         
interest income to the extent possible within these guidelines. MAYAN satisfies 
liquidity requirements by investing excess cash in securities with different    
maturities to match projected cash needs and limit concentration of credit risk 
by diversifying its investments among a variety of high credit-quality issuers. 
The portfolio includes investment grade marketable securities with active       
secondary or resale markets. All short-term investments have a fixed interest   
rate and are carried at market value, which approximates cost. Due to the       
short-term nature of its investments, MAYAN believes that there is no material  
risk exposure. Therefore, no quantitative disclosures are required.             

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Recent Accounting Pronouncements                                                

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments  
and Hedging Activities." SFAS 133 established new standards of accounting and   
reporting for derivative instruments and hedging activities. SFAS 133 requires  
that all derivatives be recognized at fair value in the statement of financial  
position and that the corresponding gains or losses be reported either in the   
statement of operations or as a component of comprehensive income (loss),       
depending upon the hedging type of relationship that exists. SFAS 133, as       
amended by SFAS Nos. 137 and 138, "Deferral of the Effective Date of FASB       
Statement No. 133", was effective for the MAYAN's fiscal year beginning July 1, 
2000. As MAYAN does not currently hold derivative instruments or engage in      
hedging activities, MAYAN determined that the adoption of this statement did    
not have a material impact on its financial position, results of operations or  
cash flows.                                                                     

In December 1999, the Securities and Exchange Commission issued Staff     
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements,"     
which provides guidance on the recognition, presentation and disclosure of      
revenue in financial statements filed with the SEC. SAB 101 outlines the basic  
criteria that must be met to recognize revenue and provides guidance for        
disclosures related to revenue recognition policies. MAYAN intends to follow    
the guidance of SAB 101 once it begins to recognize revenue.                    

In March 2000, the Financial Accounting Standards Board issued            
Interpretation No. 44 "Accounting for Certain Transactions Involving Stock      
Compensation, an Interpretation of APB Opinion No. 25." FIN 44 clarified the    
application of Opinion No. 25 for (a) definition of employee for purposes of    
applying Opinion No. 25, (b) the criteria for determining whether a plan        
qualifies as a noncompensatory plan, (c) the accounting consequences of various 
modifications to the terms of a previously fixed stock option or award and (d)  
the accounting for an exchange of stock compensation awards in a business       
combination. FIN 44 was effective July 1, 2000 and did not have a material      
impact on MAYAN's financial position, results of operations or cash flows.      

EXPERTS 

The financial statements of Ariel Corporation and its subsidiaries as of  
December 31, 2000 and 1999 and for each of the years in the three years ended   
December 31, 2000, included in this registration statement, have been so        
included in reliance on the report (which contains an explanatory paragraph     
relating to Ariel Corporation's ability to continue as a going concern as       
described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP, 
independent accountants, given on the authority of said firm as experts in      
auditing and accounting.                                                        

The financial statements of MAYAN Networks Corporation as of June 30, 1999
and 2000, and for the period from July 30, 1997 (inception) through June 30,    
1998 and the years ended June 30, 1999 and 2000 included in this joint proxy    
statement/prospectus have been audited by Deloitte & Touche LLP, independent    
auditors, as stated in their report appearing herein (which report expresses an 
unqualified opinion and includes an explanatory paragraph regarding uncertainty 
of MAYAN Networks' ability to continue as a going concern), and have been so    
included in reliance upon the report of such firm given upon their authority as 
experts in accounting and auditing.                                             

LEGAL MATTERS 

The validity of the shares of Ariel common stock offered by this document 
will be passed upon for Ariel Corporation by Paul & Rosen, LLP, New York, NY.   
Attorneys of the firm Paul & Rosen, LLP beneficially own an aggregate of 45,000 
shares of Ariel's common stock. Certain legal matters with respect to federal   
income tax consequences in connection with the merger will be passed upon for   
MAYAN by Brobeck, Phleger & Harrison LLP, Palo Alto, California. Attorneys of   
the firm Brobeck, Phleger & Harrison LLP beneficially own an aggregate of       
17,969 shares of MAYAN Series D preferred stock.                                

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WHERE YOU CAN FIND MORE INFORMATION 

Ariel files annual, quarterly and special reports, proxy statements and   
other information with the Securities and Exchange Commission. Stockholders may 
read and copy any reports, statements or other information filed by Ariel at    
the Commission's public reference rooms in Washington, D.C., New York, New York 
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further 
information on the public reference rooms. Ariel's filings with the Commission  
are also available to the public from commercial document-retrieval services    
and at the Web site maintained by the Commission at http://www.sec.gov.         

  Ariel has filed a registration statement with the Commission to register the
Ariel common stock to be issued to MAYAN shareholders in the merger. This joint 
proxy statement/prospectus is a part of that registration statement and         
constitutes a proxy statement and prospectus of Ariel in addition to being a    
proxy statement of MAYAN for use at its special meeting.                        

Ariel has supplied all information contained in this document relating to 
Ariel, and MAYAN has supplied all information contained in this document        
relating to MAYAN. Neither Ariel nor MAYAN warrants the accuracy or             
completeness of information relating to the other.                              

  Stockholders can obtain any of the reports referenced above through Ariel or
the Commission. Documents are available from Ariel without charge, excluding    
all exhibits. Stockholders may obtain those documents by requesting them orally 
or in writing to the following addresses or by telephone:                       

Ariel Corporation 
2540 Route 130
Cranbury, New Jersey 08512
Attention: Harold Paul
(609) 860-2900

 If you would like to request documents, please do so by              , 2001
in order to receive them before the Ariel special meeting and by           ,    
2001 in order to receive them before the MAYAN special meeting.                 

Ariel stockholders should rely only on the information contained in this  
joint proxy statement/prospectus to vote on the merger agreement. MAYAN         
shareholders should rely only on the information contained in this joint proxy  
statement/prospectus to vote on the merger agreement and the merger. Neither    
Ariel nor MAYAN has authorized anyone to provide information that is different  
from what is contained in this joint proxy statement/prospectus. This joint     
proxy statement/prospectus is dated              , 2001. Stockholders should    
not assume that the information contained in this document is accurate as of    
any other date, and neither the mailing of this document to stockholders nor    
the issuance of Ariel common stock in the merger shall create any implication   
to the contrary.                                                                

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FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS 

                                                                [Download Table]

                                                                        PAGE(S)
                                                                        -------
                                                                               
INDEX TO FINANCIAL STATEMENTS--ARIEL CORPORATION                               

Report of Independent Accountants.....................................    F-2  
CONSOLIDATED FINANCIAL STATEMENTS (Audited) At December 31, 2000 and           
 1999:                                                                         
  Consolidated Balance Sheets.........................................    F-3  
  For the years ended December 31, 2000, 1999 and 1998:                        
  Consolidated Statements of Income and Comprehensive Income..........    F-4  
  Consolidated Statements of Stockholders' Equity.....................    F-5  
  Consolidated Statements of Cash Flows...............................    F-6  
  Notes to Consolidated Financial Statements..........................    F-7  

CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)                                  
  Consolidated Balance Sheets as of March 31, 2001 and December 31,            
   2000...............................................................   F-28  
  Consolidated Statements of Operations and Comprehensive Losses For           
   the Three Months Ended March 31, 2001 and 2000.....................   F-29  
  Consolidated Statements of Cash Flows For the Three Months Ended             
   March 31, 2001 and 2000............................................   F-30  
  Notes to Consolidated Financial Statements..........................   F-31  
INDEX TO FINANCIAL STATEMENTS--MAYAN NETWORKS CORPORATION                      
Independent Auditors' Report..........................................   F-34  
Balance Sheets as of June 30, 1999 and 2000 and March 31, 2001                 
 (unaudited)..........................................................   F-35  
Statements of Operations for the Period from July 30, 1997 (Inception)         
 Through June 30, 1998, the Years Ended June 30, 1999 and 2000 and             
 Nine Months Ended March 31, 2000 and 2001 (unaudited) and the Period          
 from July 30, 1997 (Inception) Through March 31, 2001 (Cumulative)            
 (unaudited)..........................................................   F-36  
Statements of Shareholders' Equity and Comprehensive Loss for the              
 Period from July 30, 1997 (Inception) Through June 30, 1998, the              
 years ended June 30, 1999 and 2000 and nine months ended March 31,            
 2001 (unaudited).....................................................   F-37  
Statements of Cash Flows for the Period from July 30, 1997 (Inception)         
 Through June 30, 1998, the Years Ended June 30, 1999 and 2000 and             
 Nine Months Ended March 31, 2000 and 2001 (unaudited) and the Period          
 from July 30, 1997 (Inception) Through March 31, 2001 (Cumulative)            
 (unaudited)..........................................................   F-38  
Notes to Financial Statements for the Period from July 30, 1997                
 (Inception) Through June 30, 1998, Years Ended June 30, 1999 and 2000         
 and Nine Months Ended March 31, 2000 and 2001 (unaudited) and the             
 Period from July 30, 1997 (Inception) Through March 31, 2001                  
 (Cumulative) (unaudited).............................................   F-39  

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REPORT OF INDEPENDENT ACCOUNTANTS 

To the Board of Directors and Stockholders of ARIEL CORPORATION:                

  In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, cash flows and stockholders' equity      
present fairly, in all material respects, the financial position of ARIEL       
CORPORATION and subsidiaries (the Company), at December 31, 2000 and 1999, and  
the results of their operations and their 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 of America. 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 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 misstatements. 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 audits provide a          
reasonable basis for our opinion.                                               

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the         
financial statements, the Company is experiencing difficulty in generating      
sufficient cash flow to meet its obligations and sustain its operations and has 
experienced recurring losses from operations, all of which raise substantial    
doubt about its ability to continue as a going concern. Management's plans in   
regard to these matters are also described in Note 1. The financial statements  
do not include any adjustments that might result from the outcome of these      
uncertainties.                                                                  

PricewaterhouseCoopers LLP                                                      

Florham Park, New Jersey                                                        
February 21, 2001, except as to Notes 3 and 20,                                 
which are as of March 28, 2001                                                  

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ARIEL CORPORATION 

CONSOLIDATED BALANCE SHEETS 

                                                                [Download Table]

                                                          December 31,         
                                                    -------------------------- 
                                                        2000          1999     
                                                    ------------  ------------ 
                                                                               
                      ASSETS                                                   
Current assets:                                                                
  Cash and cash equivalents........................ $  1,129,246  $  7,088,431 
  Accounts receivable, net of allowance for                                    
   doubtful accounts of $644,706 in 2000 and                                   
   $1,019,731 in 1999..............................    2,077,581     3,091,362 
  Other receivables................................      240,082       383,676 
  Inventories, net.................................    2,559,260     3,303,057 
  Prepaid expenses.................................      495,859       775,943 
                                                    ------------  ------------ 
    Total current assets...........................    6,502,028    14,642,469 
Equipment, net of accumulated depreciation and                                 
 amortization......................................    1,261,112     1,387,128 
Goodwill, intangible and other assets..............    1,444,911     3,787,475 
                                                    ------------  ------------ 
    Total assets................................... $  9,208,051  $ 19,817,072 
                                                    ============  ============ 
       LIABILITIES and STOCKHOLDERS' EQUITY                                    
Current liabilities:                                                           
  Accounts payable................................. $  1,705,696  $  2,802,725 
  Accrued expenses.................................    1,688,971     1,898,648 
  Current portion of long term debt................      520,263     1,895,926 
  Current portion of capital-lease obligation......      110,033       126,438 
  Royalties payable................................       91,210        91,210 
                                                    ------------  ------------ 
    Total current liabilities......................    4,116,173     6,814,947 
Capital-lease obligation, net of current portion...      104,966       215,901 
Long-term debt.....................................    1,268,721     1,788,985 
Commitments and contingencies (See Note 14)                                    
Stockholders' equity:                                                          
Preferred stock, $.001 par value:                                              
  Authorized--2,000,000............................                            
  Issued and outstanding--none.....................                            
Common stock, $.001 par value:                                                 
  Authorized--20,000,000...........................                            
  Issued and outstanding--13,073,920 in 2000 and                               
   10,832,597 in 1999..............................       13,074        10,833 
Additional paid-in capital.........................   46,436,667    37,627,809 
Unrealized gain/(loss) on foreign currency                                     
 translation.......................................     (945,806)     (503,711)
Accumulated deficit................................  (41,785,744)  (26,137,692)
                                                    ------------  ------------ 
    Total stockholders' equity.....................    3,718,191    10,997,239 
                                                    ------------  ------------ 
    Total liabilities and stockholders' equity..... $  9,208,051  $ 19,817,072 
                                                    ============  ============ 

The accompanying notes are an integral part of the financial statements.

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ARIEL CORPORATION 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

                                                                [Download Table]

                                          For the Years Ended December 31,      
                                       ---------------------------------------- 
                                           2000          1999          1998     
                                       ------------  ------------  ------------ 
                                                                                
Sales................................  $  8,007,074  $ 11,626,546  $ 17,445,829 
Cost of goods sold...................     4,497,804     5,096,014    11,965,220 
                                       ------------  ------------  ------------ 
Gross profit.........................     3,509,270     6,530,532     5,480,609 
Selling and marketing expenses.......     5,683,349     5,634,070     5,265,542 
General and administrative expenses..     6,277,270     7,312,680     9,710,275 
Research and development expenses....     5,321,127     5,688,414     6,722,905 
Restructuring and special charges....     2,356,656       369,528           --  
                                       ------------  ------------  ------------ 
Total operating expenses.............    19,638,402    19,004,692    21,698,722 
                                       ------------  ------------  ------------ 
    Loss from operations.............   (16,129,132)  (12,474,160)  (16,218,113)
Gain on sale of assets...............           --            --     29,537,896 
Interest income......................       372,984       440,477       432,596 
Interest expense.....................      (373,092)     (527,611)   (1,371,970)
Other income.........................        57,250        61,479        64,729 
                                       ------------  ------------  ------------ 
    Income/(Loss) before                                                        
     Provision/(Benefit) for                                                    
     income taxes....................   (16,071,990)  (12,499,815)   12,445,138 
Provision/(Benefit) for income                                                  
 taxes...............................      (423,938)          --        368,632 
                                       ------------  ------------  ------------ 
    Net Income/(Loss)................  $(15,648,052) $(12,499,815) $ 12,076,506 
Other comprehensive income/(loss),                                              
 net of tax:                                                                    
    Foreign currency translation                                                
     adjustments.....................      (442,095)     (534,983)       31,272 
                                       ------------  ------------  ------------ 
Comprehensive Income/(Loss)..........  $(16,090,147) $(13,034,798) $ 12,107,778 
                                       ============  ============  ============ 
Basic and Diluted Per Share Data:                                               
  Shares outstanding--Basic..........    12,726,382     9,843,402     9,652,664 
  Earnings/(Loss) per share--Basic...        $(1.23)       $(1.27)        $1.25 
  Weighted average number of common                                             
   shares outstanding--Diluted.......    12,726,382     9,843,402    10,843,215 
  Earnings/(Loss) per share--                                                   
   Diluted...........................        $(1.23)       $(1.27)        $1.11 

The accompanying notes are an integral part of the financial statements.

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ARIEL CORPORATION 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
For the years ended December 31, 2000, 1999 and 1998

                                                        [Enlarge/Download Table]

                                                                        Unearned                              
                                                          Unrealized  Compensation   Retained                 
                             Common Stock    Additional   Gain/(Loss)  related to    Earnings        Total    
                          ------------------   Paid-In    on Currency    Stock     (Accumulated  Stockholders'
                            Shares   Amount    Capital    Translation   Options      Deficit)       Equity    
                          ---------- ------- -----------  ----------- ------------ ------------  -------------
                                                                                                              
Balance at December 31,                                                                                       
 1997...................   9,234,250 $ 9,235 $30,949,180   $     --    $(110,819)  $(25,714,383) $  5,133,213 
Issuance of common stock                                                                                      
 in connection with                                                                                           
 exercise of 425,900                                                                                          
 common stock options...     425,900     425   1,828,115         --          --             --      1,828,540 
Issuance of common stock                                                                                      
 in connection with                                                                                           
 exercise of 100,000                                                                                          
 common stock purchase                                                                                        
 warrants...............     100,000     100     271,900         --          --             --        272,000 
Costs incurred in                                                                                             
 connection with the                                                                                          
 issuance of common                                                                                           
 stock..................         --      --      (49,128)        --          --             --        (49,128)
Unearned compensation                                                                                         
 related to stock                                                                                             
 options................         --      --      302,275         --     (302,275)           --            --  
Amortization of unearned                                                                                      
 compensation...........         --      --          --          --      413,094            --        413,094 
Unrealized gain/(loss)                                                                                        
 on currency                                                                                                  
 translation............         --      --          --       31,272         --             --         31,272 
1998 Net Income.........         --      --          --          --          --      12,076,506    12,076,506 
                          ---------- ------- -----------   ---------   ---------   ------------  ------------ 
Balance at December 31,                                                                                       
 1998...................   9,760,150 $ 9,760 $33,302,342   $  31,272   $     --    $(13,637,877) $ 19,705,497 
Issuance of common stock                                                                                      
 in connection with                                                                                           
 exercise of 866,364                                                                                          
 common stock options...     866,364     867   3,728,979         --          --             --      3,729,846 
Issuance of common stock                                                                                      
 in connection with                                                                                           
 exercise of 206,083                                                                                          
 common stock purchase                                                                                        
 warrants...............     206,083     206     264,794         --          --             --        265,000 
Costs incurred in                                                                                             
 connection with the                                                                                          
 issuance of common                                                                                           
 stock..................         --      --      (48,869)        --          --             --        (48,869)
Value of common stock                                                                                         
 warrants in connection                                                                                       
 with debt financing....         --      --      380,563         --          --             --        380,563 
Unrealized gain/(loss)                                                                                        
 on currency                                                                                                  
 translation............         --      --          --     (534,983)        --             --       (534,983)
1999 Net Loss...........         --      --          --          --          --     (12,499,815)  (12,499,815)
                          ---------- ------- -----------   ---------   ---------   ------------  ------------ 
Balance at December 31,                                                                                       
 1999...................  10,832,597 $10,833 $37,627,809   $(503,711)  $     --    $(26,137,692) $ 10,997,239 
Issuance of common stock                                                                                      
 in connection with                                                                                           
 exercise of 90,000                                                                                           
 common stock options...      90,000      90     250,535         --          --             --        250,625 
Costs incurred in                                                                                             
 connection with the                                                                                          
 issuance of common                                                                                           
 stock..................         --      --     (762,409)        --          --             --       (762,409)
Issuance of common                                                                                            
 stock..................   2,151,000   2,151   8,576,849         --          --             --      8,579,000 
Stock purchase warrants                                                                                       
 issued for services                                                                                          
 rendered...............         --      --      239,513         --          --             --        239,513 
Non-cash compensation                                                                                         
 related to                                                                                                   
 resignation............         --      --      504,370         --          --             --        504,370 
Unrealized gain/(loss)                                                                                        
 on currency                                                                                                  
 translation............         --      --          --     (442,095)        --             --       (442,095)
2000 Net Loss...........         --      --          --          --          --     (15,648,052)  (15,648,052)
                          ---------- ------- -----------   ---------   ---------   ------------  ------------ 
Balance at December 31,                                                                                       
 2000...................  13,073,597 $13,074 $46,436,667   $(945,806)  $     --    $(41,785,744) $  3,718,191 
                          ========== ======= ===========   =========   =========   ============  ============ 

The accompanying notes are an integral part of the financial statements.

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ARIEL CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

                                                                [Download Table]

                                        For the Years Ended December 31,      
                                     ---------------------------------------- 
                                         2000          1999          1998     
                                     ------------  ------------  ------------ 
                                                                              
Cash flows from operating                                                     
 activities:                                                                  
Net income/(loss)................... $(15,648,052) $(12,499,815) $ 12,076,506 
Adjustments to reconcile net                                                  
 income/(loss) to net cash used in                                            
 operating activities:                                                        
  Depreciation and amortization.....      878,301       932,409     1,265,801 
  Amortization of goodwill and                                                
   intangibles......................      563,661     1,010,677        92,105 
  Acquired in process research and                                            
   development......................          --            --        297,330 
  (Gain)/Loss on sale of assets.....          --         60,911   (29,537,896)
  Amortization of debt issuance                                               
   financing costs..................      278,985       122,988        64,719 
  Provision for doubtful accounts...      289,313       546,144       851,415 
  Provision for inventory                                                     
   obsolescence.....................    1,497,961       265,421     2,293,500 
  Non-cash compensation expense.....      129,736           --        413,094 
  Non-cash restructuring and special                                          
   charges..........................    2,050,511           --            --  
(Increase) decrease in assets:                                                
  Accounts receivable...............      614,457       (69,335)   (2,813,966)
  Other receivables.................     (206,176)      545,883      (522,361)
  Inventories.......................     (763,498)     (729,945)   (1,700,796)
  Other assets......................       35,057       (65,267)      (34,176)
Increase (decrease) in liabilities:                                           
  Accounts payable and accrued                                                
   expenses.........................   (1,189,935)   (2,683,382)    1,062,523 
  Royalties payable, related                                                  
   parties..........................          --         (4,200)       15,676 
                                     ------------  ------------  ------------ 
    Net cash used in operating                                                
     activities.....................  (11,469,679)  (12,567,511)  (16,176,526)
                                     ------------  ------------  ------------ 
Cash flows from investing                                                     
 activities:                                                                  
  Proceeds from sale of assets......          --            --     31,348,753 
  Acquisition of businesses (net of                                           
   cash acquired)...................          --            --     (3,340,122)
  Purchase of equipment.............     (758,931)     (593,851)     (724,032)
                                     ------------  ------------  ------------ 
    Net cash (used in)/provided by                                            
     investing activities...........     (758,931)     (593,851)   27,284,599 
                                     ------------  ------------  ------------ 
Cash flows from financing                                                     
 activities:                                                                  
  Proceeds from debt financing......          --            --      4,500,000 
  Proceeds from issuance of common                                            
   stock, net.......................    7,816,591           --            --  
  Proceeds from exercise of stock                                             
   options and warrants, net........      250,535     4,326,540     2,051,412 
  Principal payments on capital                                               
   lease obligations................     (101,426)      (25,261)          --  
  Principal payments on debt........   (1,714,334)   (2,085,316)   (2,308,774)
                                     ------------  ------------  ------------ 
    Net cash provided by financing                                            
     activities.....................    6,251,456     2,215,963     4,242,638 
                                     ------------  ------------  ------------ 
Effect of exchange rate changes on                                            
 cash and cash equivalents..........       17,969        37,255           --  
                                     ------------  ------------  ------------ 
Net increase (decrease) in cash and                                           
 cash equivalents...................   (5,959,185)  (10,908,144)   15,350,711 
  Cash and cash equivalents,                                                  
   beginning of year................    7,088,431    17,996,575     2,645,864 
                                     ------------  ------------  ------------ 
  Cash and cash equivalents, end of                                           
   period........................... $  1,129,246  $  7,088,431  $ 17,996,575 
                                     ============  ============  ============ 

The accompanying notes are integral parts of the financial statements.

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business Description:                                                        

Ariel Corporation (the "Company") is a technology company that has        
historically had digital signal processing (DSP) as its core strength. DSP is   
an enabling technology driving rapidly growing technology markets such as       
Remote Access Service and Internet Service Providers ("ISPs").                  

The consolidated financial statements of the Company have been prepared on
the basis of accounting principles applicable to a going concern, which         
contemplates the realization of assets and the satisfaction of liabilities in   
the normal course of business. The Company incurred net losses of approximately 
$15.6 million and $12.5 million for the years ended December 31, 2000 and 1999, 
respectively, and expects to incur costs and expenses in excess of revenues as  
it continues to execute its business strategy in the ISP and Original Equipment 
Manufacturers ("OEM") markets. Absent the pending transaction described in Note 
20 (which is contingent upon a number of factors also described in Note 20),    
the Company has limited financial resources available to support its ongoing    
operations, fund its product development program to develop and market new      
competitive remote access technology, and pay its obligations as they become    
due.                                                                            

 The factors noted in the above paragraph raise substantial doubt concerning
the ability of the Company to continue as a going concern. The consolidated     
financial statements do not include any adjustments relating to the             
recoverability and classification of asset carrying amounts or the amount and   
classification of liabilities that might result should the Company be unable to 
continue as a going concern. The ability of the Company to continue as a going  
concern is dependent upon the ongoing support of its stockholders, creditors,   
and certain key customers, the consummation of the pending transaction as       
described in Note 20 (or the closing of similar debt or equity transactions),   
and/or its ability to successfully develop and market its remote access         
products and technology at economically feasible levels in the highly           
competitive and rapidly changing technology environment.                        

As discussed in Note 20, the Company has a pending transaction with MAYAN 
Networks which the Company believes, if consummated, will provide adequate      
financial resources to support the Company through March 2002. There is no      
assurance, however, that the Company will be able to close the pending          
transaction or that such financial resources provided by the pending            
transaction, if closed, will be sufficient to support the Company until it      
reaches a successful level of operations.                                       

2. Summary of Significant Accounting Policies:                                  

Principles of Consolidation                                                   

The consolidated financial statements include the accounts of the Company 
and its wholly-owned subsidiaries as of and for the years ended December 31,    
2000, 1999 and 1998. All significant intercompany accounts and transactions     
have been eliminated in consolidation.                                          

Revenue Recognition                                                           

Revenue is derived from the sale of hardware and software products for use
in DSP Original Equipment Manufacturers ("OEM"), Internet Service Providers and 
Data Communications applications. The Company recognizes the sale of a product  
at the time the product is shipped to the customer and when both the collection 
of the resulting receivable is probable and no significant vendor and/or post-  
contract customer support obligations remain.                                   

Cash and Cash Equivalents                                                     

  The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.                                 

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Investments                                                                   

  The Company's current investment policy is to invest available cash balances
in high quality debt securities. The cost of securities sold is based on the    
specific identification method.                                                 

Concentration of Credit Risk                                                  

Financial instruments which potentially subject the Company to a          
concentration of credit risk consist principally of cash, cash equivalents and  
trade receivables. The Company places its cash and cash equivalents with        
commercial banks. From time to time the Company had significant sales to a few  
customers which created a concentration of credit risk. Generally, the Company  
does not require collateral to support customer receivables.                    

During 2000 two customers represented 20% and 11% of total Company sales, 
respectively. During 1999 three customers accounted 22%, 12% and 11% of sales   
respectively. Combined, these customers comprised 45% of sales in 1999. During  
1998, one customer accounted for 25% of the Company's sales. Two other          
customers accounted for 14% and 13%, respectively, of total Company sales       
during 1998.                                                                    

Inventories                                                                   

  Inventories are stated at lower of cost using the first-in, first-out method
or market. The Company computes the lower of cost or market in accordance with  
the specific identification method.                                             

  The markets for the Company's products are characterized by rapidly changing
technology and the consequential obsolescence of relatively new products. The   
Company has recorded certain estimated reserves against inventories related to  
such technological obsolescence.                                                

Equipment                                                                     

Equipment consists principally of computer equipment and software, office 
equipment and furniture and fixtures and is stated at cost. Depreciation is     
provided for using the straight-line method over the estimated useful lives of  
the assets, which are generally three to five years. Expenditures for           
maintenance and repairs, which do not extend the economic useful life of the    
related assets, are charged to operations as incurred. Gains or losses on       
disposal of equipment are reflected in the statements of operations.            

Goodwill and Intangible Assets                                                

Purchased technology and other intangible assets are recorded at cost and 
are amortized on a straight-line basis over five years. Goodwill represents the 
excess of cost over the fair value of identifiable assets acquired and is being 
amortized on a straight-line basis over 5 years. In accordance with SFAS No.    
121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of,"    
the Company reviews for impairment of long-lived assets and certain             
identifiable intangibles whenever events or changes in circumstances indicated  
that the carrying amount of an asset may not be recoverable. In general, the    
Company will recognize an impairment loss when the sum of undiscounted expected 
future net cash flows is less than the carrying amount of such assets. The      
measurement for such an impairment loss is based on the fair value of the       
asset.                                                                          

 At each balance sheet date, the Company reviews recoverability of goodwill,
not identified with long-lived assets, based on estimated undiscounted future   
net cash flows from operating activities compared with the carrying value of    
the goodwill, and recognizes any impairment on the basis of such comparison.    
The recognition and measurement of goodwill impairment is assessed at the       
business-unit level.                                                            

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Other Assets                                                                  

  Other assets include deferred financing costs associated with debt financing
which are stated at cost. Amortization of deferred financing costs is on a      
straight-line basis over the life of the debt agreement.                        

Foreign Currency Translation                                                  

 Financial position and results of operations of the Company's international
subsidiaries have been measured using local currencies as the functional        
currency. Assets and liabilities of these operations are translated at the      
exchange rates in effect at the end of the period. Statement of operations      
accounts are translated at the average rates of exchange prevailing during the  
period presented. Translation adjustments arising from the use of differing     
exchange rates from period to period are included in the cumulative translation 
account in stockholders' equity.                                                

Estimates Used in Preparation of Financial Statements                         

The preparation of financial statements in conformity with generally      
accepted accounting principles requires management to make estimates and        
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenues and expenses during the         
reporting periods. Actual results could differ from those estimates. Estimates  
are used for, but not limited to, the accounting for: allowance for             
uncollectible accounts receivable, allowance for inventory obsolescence,        
impairment of goodwill and intangibles, depreciation and amortization, and      
accrued expenses.                                                               

Research and Development and Software Development Costs:                      

  Costs incurred in the research and development of the Company's products are
expensed as incurred, except for certain software development costs.            

The Company accounts for software development costs in accordance with    
Statement of Financial Accounting Standards No. 86, ("SFAS"), "Accounting for   
the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed". Costs 
associated with the development of computer software are expensed prior to      
establishment of technological feasibility and capitalized thereafter until the 
product is available for general release to customers and amortized over the    
economic life of the software product.                                          

Effective January 1, 1999, the Company adopted Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for        
Internal Use" ("SOP 98-1"). Among other provisions, SOP 98-1 requires that      
entities capitalize certain internal use software costs once certain criteria   
are met. Under SOP 98-1, overhead, general and administrative and training      
costs are not to be capitalized.                                                

Earnings Per Share Data                                                       

In accordance with SFAS No. 128, "Earnings per Share" ("SFAS No. 128"),   
basic earnings per share are calculated based on the weighted average number of 
shares of common stock outstanding during the reporting period. Diluted         
earnings per share are calculated giving effect to all potentially dilutive     
common shares, assuming such shares were outstanding during the reporting       
period.                                                                         

Income Taxes                                                                  

The Company accounts for income taxes in accordance with the provisions of
SFAS No. 109, "Accounting for Income Taxes". SFAS No. 109 requires recognition  
of deferred tax liabilities and assets for                                      

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

the expected future tax consequences of events that have been included in the   
financial statements or tax return. Under this method, deferred tax liabilities 
and assets are determined based on the differences between the financial        
statement and tax basis of assets and liabilities ("temporary differences")     
using enacted tax rates in effect for the year in which the differences are     
expected to reverse. Valuation allowances are established when necessary to     
reduce deferred tax assets to the amount that is "more likely than not" to be   
realized.                                                                       

Advertising/Marketing                                                         

Advertising and Marketing costs are expensed as incurred and amounted to  
$998,528, $1,102,211 and $703,625, for the years ended December 31, 2000, 1999  
and 1998, respectively.                                                         

Comprehensive Income                                                          

SFAS No. 130, "Reporting Comprehensive Income," requires a full set of    
general purpose financial statements to be expanded to include the reporting of 
"comprehensive income." Comprehensive income is comprised of two components,    
net income and other comprehensive income. For the years ended December 31,     
2000, 1999 and 1998, the only item qualifying as other comprehensive income was 
unrealized gain or loss on foreign currency translation.                        

Reclassifications                                                             

Certain prior year amounts have been reclassified for consistency with the
current year presentation. Such reclassifications had no impact to net          
income/(loss) and stockholders' equity.                                         

Supplemental Cash Flow Information                                            

Interest paid for the years ended December 31, 2000, 1999 and 1998 was    
$400,061, $549,411, and $1,362,978, respectively. Income taxes paid in 1998     
were $342,110. No income taxes were paid in 2000 and 1999.                      

Excluded from the statements of cash flows were $19,746 and $62,273 of    
equipment purchases which were included in accounts payable and accrued         
expenses at December 31, 2000 and 1998, respectively. There were no such        
purchases accrued as of December 31, 1999.                                      

The Company incurred capital lease obligations of $351,195 during 1999.   
There were no capital lease obligations incurred in 2000 and 1998.              

Also see Notes 8 and 17 for additional non-cash transactions in connection
with the issuance of shares of common stock in consideration for services       
rendered.                                                                       

Recently Issued Accounting Pronouncements                                     

In March 2000, the Financial Accounting Standards Board issued            
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock     
Compensation, an interpretation of APB Opinion No. 25" ("FIN No. 44"). The      
interpretation provides guidance for certain issues relating to stock           
compensation involving employees that arose in applying APB Opinion No. 25.     
Among other things, this interpretation clarifies (a) the definition of an      
employee for purposes of applying APB Opinion No. 25, (b) the criteria for      
determining whether a plan qualifies as a noncompensatory plan, (c) the         
accounting consequence of various modifications to the terms of a previously    
fixed stock option or award and (d) the accounting for an exchange of stock     
compensation awards in a business combination. The provisions of FIN No. 44 are 
effective July 1, 2000, except for the provisions regarding                     

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

modifications to fixed stock options or awards that reduce the exercise price   
of an award, which apply to modifications made after December 15, 1998.         
Provisions regarding modifications to fixed stock options or awards to add      
reload features apply to modifications made after January 12, 2000. The effect  
of adopting FIN No. 44 did not have a material impact on the Company's          
financial statements.                                                           

 In December 1999, the staff of the SEC issued SAB 101, which summarizes the
staff's interpretations of the application of generally accepted accounting     
principles to revenue recognition. The staff provided this guidance due in part 
to the large number of revenue recognition issues that it has encountered in    
registrant filings. In June 2000, SAB 101B, "Amendment: Revenue Recognition in  
Financial Statements", was issued, which deferred the effective date of SAB 101 
until the fourth fiscal quarter of 2000. The effect of adopting SAB 101 did not 
have a material impact on the Company's financial statements.                   

 In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.       
133"). This statement establishes accounting and reporting standards for        
derivative instruments, including certain derivative instruments embedded in    
other contracts, and for hedging activities. It requires recognition of all     
derivatives as either assets or liabilities on the balance sheet and            
measurement of those instruments at fair value. If certain conditions are met,  
a derivative may be designated specifically as: (a) a hedge of the exposure to  
changes in the fair value of a recognized asset or liability or an unrecognized 
firm commitment (a fair value hedge), (b) a hedge of the exposure to variable   
cash flows of a forecasted transaction (a cash flow hedge), or (c) a hedge of   
the foreign currency exposure of a net investment in a foreign operation, an    
unrecognized firm commitment, an available-for-sale security, or a foreign-     
currency-denominated forecasted transaction. In June 1999, the Financial        
Accounting Standards Board issued SFAS No. 137, delaying the effective date of  
SFAS No. 133. The provisions of SFAS No. 133 are effective for all fiscal       
quarters of all fiscal years beginning after June 15, 2000. The adoption of     
SFAS No. 133 by the Company, effective January 1, 2001, had no effect on the    
Company.                                                                        

3. Acquisitions:                                                                

On November 23, 1998, the Company acquired all of the outstanding common  
stock of Solutions for Communications and International ISDN, S.A. (SCii). The  
transaction was accounted for using the purchase method of accounting.          
Accordingly, the purchase price was allocated to the estimated fair value of    
the assets acquired and liabilities assumed. Purchase consideration, including  
related transaction costs, consisted of $3,389,030 in cash.                     

  Valuation of the intangible assets acquired was determined by an independent
appraisal company and consists of purchased in-process research and development 
(IPR&D), proven technology and an assembled workforce. The purchase price       
exceeded the estimated fair value of tangible and intangible assets acquired by 
$4,419,284 which was recorded as goodwill.                                      

The table below is an analysis of the purchase price allocation:          

                                                                [Download Table]
                                                                         
Cash......................................................... $ 3,080,073
Direct Acquisition Costs..................................... $   308,957
SCii liabilities assumed, including estimated contingent                 
 liabilities................................................. $ 3,686,527
                                                              -----------
    Total Purchase Price..................................... $ 7,075,557
                                                              ===========
Estimated Fair Value of Tangible Assets Acquired............. $ 1,344,523
Estimated Fair Value of IPR&D................................ $   297,330
Estimated Fair Value of Indentifiable intangible assets...... $ 1,014,420
Goodwill..................................................... $ 4,419,284
                                                              -----------
    Total.................................................... $ 7,075,557
                                                              ===========

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

 Management, based upon an independent appraisal, estimates that $297,330 of
the purchase price represents the fair value of purchased IPR&D that had not    
yet reached technological feasibility and has no alternative future use. The    
amount allocated to IPR&D was expensed as a non-recurring, non-tax-deductible   
charge upon consummation of the acquisition. The Company is using acquired in-  
process research and development in the area of mid-range ISDN remote access    
technology which it believes will broaden the Company's product line over the   
next several years.                                                             

The identifiable intangible assets of $1,014,420 included in the purchase 
price allocation set forth above are comprised of proven technology with        
appraised fair value of $926,970 and an assembled workforce with an appraised   
fair value of $87,450. During 1999, goodwill was reduced by approximately       
$600,000 related to revisions of estimates for contingent liabilities.          

In June 2000, the Company recorded a restructuring charge of $2,356,656 of
which $1,546,141 relates to the partial impairment of the carrying value of     
goodwill recorded with the Company's November 1998 purchase of SCii. The write- 
down of goodwill resulted from the Company's June 2000 decision to phase out    
SCii's low-end basic rate ISDN (BRI) products and to dismiss certain SCii       
employees related to these products and technologies. The decision was based on 
reduced sales of BRI products due to the loss of major customers and advances   
in competing technologies. Accordingly, future BRI sales forecasts have been    
reduced and the Company recognized the impairment of goodwill to the extent     
that undiscounted future net cash flows from operating activities do not exceed 
the carrying value of the goodwill.                                             

On March 12, 2001 the Company executed a settlement agreement whereby the 
former owner of SCii will reimburse the Company approximately $930,000. As of   
March 27, 2001, the Company has received approximately $600,000 and an          
additional $330,000 is due prior to May 25, 2001.                               

4. Inventories:                                                                 

Due to the introduction of the Company's new product line, the RS4200, in 
the fall of 1999, the Company has experienced reduced demand for its RS2000     
product. During 2000 the Company has initiated reduced pricing and other        
programs to consume the remaining RS2000 inventory. At December 31, 2000        
approximately $1,200,000 of RS2000 inventory remained on hand. As a result,     
reserves of $1,070,000 and $195,000 were recorded at December 31, 2000 and      
1999, respectively.                                                             

Inventories, net of allowance, consists of the following:                 

                                                                [Download Table]

                                                          December 31,     
                                                      ---------------------
                                                         2000       1999   
                                                      ---------- ----------
                                                                           
Component materials.................................. $  556,429 $  371,821
Work-in-progress.....................................    557,632    814,923
Finished goods.......................................  1,445,199  2,116,313
                                                      ---------- ----------
                                                      $2,559,260 $3,303,057
                                                      ========== ==========

Inventory at December 31, 2000 and 1999 included an allocation of         
approximately $82,140 and $99,000, respectively, of capitalized general and     
administrative expenses.                                                        

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

5. Equipment:                                                                   

Equipment consists of the following:                                      

                                                                [Download Table]

                                                     December 31,        
                                                ------------------------ 
                                                   2000         1999     
                                                -----------  ----------- 
                                                                         
Computer and other equipment................... $ 3,788,145  $ 3,391,195 
Computer software..............................   1,061,733      933,483 
Office equipment and furniture and fixtures....     869,619      654,502 
Vehicles.......................................         --        89,972 
Loaner Equipment...............................     278,636      183,014 
Leasehold improvements.........................     192,478      191,471 
                                                -----------  ----------- 
                                                  6,190,611    5,443,637 
Less, accumulated depreciation and                                       
 amortization..................................  (4,929,499)  (4,056,509)
                                                -----------  ----------- 
                                                $ 1,261,112  $ 1,387,128 
                                                ===========  =========== 

Depreciation expense was $878,301, $932,409, and $1,265,801 during 2000,  
1999 and 1998 respectively. 2000 expenses included $117,000 of depreciation for 
equipment acquired under capital leases.                                        

6. Reconciliation of Weighted Average Shares:                                   

 Basic earnings per common share is calculated by dividing net income by the
weighted average number of common shares outstanding during the period. Diluted 
earnings per common share is calculated by dividing net income by the sum of    
the weighted average number of common shares outstanding, plus all additional   
common shares that would have been outstanding if potentially dilutive          
securities or common stock equivalents had been issued. The following table     
reconciles the number of shares used in the earnings per share calculations:    

                                                                [Download Table]

                                                                   1998    
                                                                ---------- 
                                                                           
Common shares--basic...........................................  9,652,664 
Effect of dilutive securities:                                             
Stock options..................................................  2,411,736 
Shares Acquired using the Treasury Stock Method................ (1,221,185)
                                                                ---------- 
Common shares--diluted......................................... 10,843,215 
                                                                ========== 

 Options to purchase 2,621,776, 1,888,313 and 508,097 shares of common stock
were outstanding at December 31, 2000, 1999 and 1998 but were not included in   
the computation of dilutive earnings per share because the options' exercise    
prices were greater than the average market price of the Company's common       
stock.                                                                          

7. Goodwill, Intangible and Other Assets:                                       

Goodwill, intangible and other assets consist of the following:           

                                                                [Download Table]

                                                         December 31,     
                                                     ---------------------
                                                        2000       1999   
                                                     ---------- ----------
                                                                          
Goodwill and Intangible Assets, net of accumulated                        
 amortization of $1,666,443 and $1,102,782 in 2000                        
 and 1999, respectively............................. $  580,966 $3,098,889
Other Assets........................................    863,945    688,586
                                                     ---------- ----------
                                                     $1,444,911 $3,787,475
                                                     ========== ==========

Amortization expense was $563,661 and $1,010,677 for the years ended      
December 31, 2000 and 1999, respectively.                                       

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

8. Non-recurring items:                                                         

Effective May 31, 2000 the Company terminated the employment of Jay Atlas,
its president and Chief Executive Officer, and entered into a termination and   
separation agreement with Mr. Atlas. As a result of Mr. Atlas' termination      
agreement, the Company recorded a charge of $810,515, which reflects severance  
and related employee benefits payments of $306,145 and an estimated value of    
$504,370 for the extension of stock options that vested during Mr. Atlas'       
employment. As of December 31, 2000, $157,597 of the accrued severance has been 
paid.                                                                           

  On September 1, 1998, the Company completed the sale of all of the assets of
its Communications Systems Group, (CSG), to publicly held Cabletron Systems,    
Inc. of Rochester, New Hampshire. The Company received $28.5 million in cash on 
September 1, 1998 in addition to a $5.0 million deposit it took down on July    
27, 1998, for total proceeds of $33.5 million for the assets of CSG. Expenses   
of the transaction netted against the proceeds were approximately $3,962,104    
including $1,541,673 to Mr. Etienne A. Perold, $140,000 to Mr. Theodore J.      
Coburn and $75,000 to Mr. Robert J. Ranalli, former directors of the Company,   
who have provided management advisory services to the Company in the past.      

Additionally, interest expense reflects a one time charge of $750,000 in  
accordance with the terms of a $2.0 million bridge loan the Company drew down   
on February 19, 1998 against the anticipated proceeds of this sale. Under the   
terms of the Bridge Loan, the note matured upon the sale of CSG. To avoid       
additional interest, the Company amended the terms to pay the one time fee upon 
receipt of the deposit on July 27, 1998. The outstanding principal balance of   
$2 million and any accrued interest was repaid at closing on September 1, 1998. 
In addition to these expenses, approximately $1.2 million in employee bonuses   
were paid as a result of the sale.                                              

9. Accrued Expenses:                                                            

Accrued expenses consists of the following:                               

                                                                [Download Table]

                                                         December 31,     
                                                     ---------------------
                                                        2000       1999   
                                                     ---------- ----------
                                                                          
Salaries, severance and related benefits............ $  699,348 $1,203,579
Trade show and marketing expenses...................    271,335        -- 
Other...............................................    718,288    695,069
                                                     ---------- ----------
                                                     $1,688,971 $1,898,648
                                                     ========== ==========

10. Credit Facility:                                                            

The Company maintains a credit facility with Transamerica. Currently the  
Company has a five-year, $3 million term loan ("Term Loan") and a $4 million    
revolving line of credit ("Revolver"). As of December 31, 2000, there was       
$1,788,984 outstanding under the Term Loan. Amounts previously drawn against    
the Revolver matured on June 12, 2000, and have been paid in full as of         
December 31, 2000.                                                              

The Company took down the Term Loan on June 12, 1997 when it signed the   
agreement. Term Loan payments of principal and interest are due in arrears in   
twenty consecutive quarterly installments, payable on the first day of each     
calendar quarter commencing October 1, 1997. The interest rate under the Term   
Loan is based on the weekly average of the interest rate on five year U.S.      
Treasury Securities for stated periods plus an agreed upon number of additional 
basis points. The interest rate in effect was 12.10% and 12.23% at December 31, 
2000 and 1999, respectively.                                                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

 The Revolver provided for up to $4.0 million in advances based on a formula
of eligible accounts receivable and inventory. Amounts drawn under the Revolver 
were collateralized accounts receivable and inventory. Eligibility was computed 
monthly and amounts drawn that were not supported by the formula were repaid at 
that time. Accordingly, a Revolver balance, if any, was reflected as a current  
liability on the balance sheet. The interest rate in effect under the Revolver  
was based on the prime rate plus 2.50%.                                         

  In addition, the credit agreement includes a material adverse effect clause,
whereby Transamerica can accelerate the due date of the loan if certain changes 
in conditions (financial or otherwise) are deemed to have a material adverse    
effect on the Company or its ability to meet its obligations.                   

In 1999 the Company incurred financing costs of $380,562 as consideration 
for waivers and amendments to certain financial covenants. There were no        
financing costs incurred during 1998 or 2000.                                   

Amortization of debt issuance costs for the years ended December 31, 2000,
1999 and 1998 were $278,985, $122,988 and $64,719, respectively.                

On October 18, 1999 the Company executed an amendment to the credit       
agreement that eliminated financial covenants that the Company must be in       
compliance with as of and for the year ended December 31, 2000 and subsequent   
periods.                                                                        

The Company believes that the fair value of this financial instrument     
approximates the carrying value. Total debt as of December 31, 2000 consisted   
of the following:                                                               

                                                                [Download Table]

                                   Short Term Debt Long Term Debt Total Debt
                                   --------------- -------------- ----------
                                                                            
Transamerica Revolver.............    $    --               --    $      -- 
Transamerica Term Note............     520,263       $1,268,721    1,788,984
                                      --------       ----------   ----------
                                      $520,263       $1,268,721   $1,788,984
                                      ========       ==========   ==========

Total debt as of December 31, 1999 consisted of the following:            

                                                                [Download Table]

                                   Short Term Debt Long Term Debt Total Debt
                                   --------------- -------------- ----------
                                                                            
Transamerica Revolver.............   $1,199,837      $      --    $1,199,837
Transamerica Term Note............      504,988       1,788,985    2,293,973
COFACE Credit.....................      171,144             --       171,144
Banque Nationale de Paris.........       14,586             --        14,586
ANVAR.............................        5,371             --         5,371
                                     ----------      ----------   ----------
                                     $1,895,926      $1,788,985   $3,684,911
                                     ==========      ==========   ==========

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Acquired foreign debt of $191,101 consisted of three notes with various   
institutions and interest rates ranging from 5.19% to 9.7%. Payments are        
monthly or due at the end of the term with the last payment made on November    
30, 2000.                                                                       

Principal payments on debt are as follows:                                

                                                                [Download Table]

                                                                      For the   
                                                                    Years Ended 
                                                                    December 31,
                                                                    ------------
                                                                                
     2001..........................................................  $  520,263 
     2002..........................................................   1,268,721 
     2003..........................................................         --  
     2004..........................................................         --  
     Thereafter....................................................         --  
                                                                     ---------- 
         Total.....................................................  $1,788,984 
                                                                     ========== 

11. Supplemental Financial Data:                                                

   The following table sets forth the activity in the Company's inventory       
reserves:                                                                       

     December 31, 1997.............................................  $  256,839 
     Additions charged to costs and expenses.......................   2,293,500 
     Additions due to valuation of assets acquired.................     135,923 
     Net write-offs................................................    (326,267)
                                                                     ---------- 
     December 31, 1998.............................................  $2,359,995 
     Additions charged to costs and expenses.......................     265,421 
     Net write-offs................................................    (498,545)
                                                                     ---------- 
     December 31, 1999.............................................  $2,126,871 
     Additions charged to costs and expenses.......................   1,497,961 
     Net write-offs................................................    (858,756)
                                                                     ---------- 
     December 31, 2000.............................................  $2,766,076 
                                                                     ========== 

   The following table sets forth the activity in the Company's allowance for   
doubtful accounts:                                                              

     December 31, 1997.............................................  $  187,446 
     Additions charged to costs and expenses.......................     851,415 
     Additions due to valuation of assets acquired.................     486,688 
     Net write-offs................................................     (64,694)
     Net recoveries................................................         --  
                                                                     ---------- 
     December 31, 1998.............................................  $1,460,855 
     Additions charged to costs and expenses.......................     546,144 
     Net write-offs................................................    (990,518)
     Net recoveries................................................       3,250 
                                                                     ---------- 
     December 31, 1999.............................................  $1,019,731 
     Additions charged to costs and expenses.......................     289,313 
     Net write-offs................................................    (706,629)
     Net recoveries................................................      42,291 
                                                                     ---------- 
     December 31, 2000.............................................  $  644,706 
                                                                     ========== 

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

12. Income Taxes:                                                               

The Company's income tax provision/(benefit) consists of the following:   

                                                                [Download Table]

                                                   Years Ended December 31, 
                                                   -------------------------
                                                     2000     1999    1998  
                                                   ---------  ----- --------
                                                                            
Current:                                                                    
  Federal......................................... $     --   $ --  $359,265
  State........................................... $(423,938) $ --  $  9,367
                                                   ---------  ----- --------
                                                   $(423,938) $ --  $368,632
                                                   ---------  ----- --------
Deferred:                                                                   
  Federal......................................... $     --   $ --  $    -- 
  State........................................... $     --   $ --  $    -- 
                                                   ---------  ----- --------
Income Tax Provision/(Benefit).................... $(423,938) $ --  $368,632
                                                   =========  ===== ========

  The differences between the United States federal statutory tax rate and the
Company's effective tax rate are as follows:                                    

                                                                [Download Table]

                                                   For the Years            
                                                 Ended December 31,         
                                                --------------------------  
                                                 2000      1999      1998   
                                                ------    ------    ------  
                                                                            
Tax at United States Federal statutory tax                                  
 rate.........................................     (34)%     (34)%      34 %
Benefit of net operating loss carryforward....     --  %     --  %     (36)%
Accounting losses for which deferred tax                                    
 benefit cannot be currently recognized.......      28 %      24 %     --  %
Foreign losses for which deferred tax benefits                              
 cannot currently be recognized...............       4 %       9 %       2 %
Other.........................................      (1)%       1 %     --  %
Alternative Minimum Tax.......................     --  %     --  %       3 %
                                                ------    ------    ------  
    Effective tax rate........................      (3)%     --  %       3 %
                                                ======    ======    ======  

  The tax effect of temporary differences and net operating loss carryforwards
which make up the significant components of the Company's net deferred tax      
assets for financial reporting purposes are as follows:                         

                                                                [Download Table]

                                                      December 31,         
                                                -------------------------- 
                                                    2000          1999     
                                                ------------  ------------ 
                                                                           
Deferred tax assets:                                                       
  Accounts receivable.......................... $    768,761  $    314,343 
  Inventory....................................    1,067,230       806,707 
  Accrued expenses.............................      562,887       191,524 
  Net operating loss carry forward.............   13,655,407     8,107,292 
  Foreign capital loss carryforward............        5,431         5,807 
  Foreign net operating loss carryforward......    1,791,544     1,510,367 
  Research and development tax credits.........    1,720,434     1,780,391 
  Depreciation.................................      416,578       167,899 
  AMT Credit...................................      302,254       337,799 
                                                ------------  ------------ 
  Total........................................   20,290,526    13,222,129 
Valuation allowance............................  (20,290,526)  (13,222,129)
                                                ------------  ------------ 
    Net........................................ $        --   $        --  
                                                ============  ============ 

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

At December 31, 2000, the Company had available net operating loss        
carryforwards and research and development credits for federal income tax       
purposes of approximately $41,100,000 and $1,300,000, respectively, which       
expire in the years 2005 through 2020. At December 31, 2000, the Company had    
available net operating loss carryforwards and research and development credits 
for state income tax purposes of approximately $42,200,000 and $600,000,        
respectively, which expire in the years 2004 through 2007. The tax benefits     
related to approximately $9,600,000 of the federal and state net operating      
losses at December 31, 2000 relate to stock option deductions and will be       
credited to additional paid-in capital if recognized. At December 31, 2000, the 
Company had available federal AMT credits of approximately $302,000 that will   
carryforward indefinitely. The timing and manner in which the net operating     
loss carryforwards and credits may be utilized to reduce future taxable income, 
if any, may be limited by Internal Revenue Code Section 382.                    

At December 31, 2000, the Company had available net operating loss        
carryforwards for foreign income tax purposes of $4,900,000 of which            
approximately $4,700,000 expires in the years 2002 through 2005. Approximately  
$200,000 of the foreign net operating loss carryforwards will carryover         
indefinitely. At December 31, 2000, the Company had available foreign capital   
loss carryforwards of $29,000 which expire in the year 2006.                    

13. Employee Benefit Plans:                                                     

Effective January 1993, the Company adopted a defined contribution savings
plan. The terms of the plan provide for eligible employees ("participants") who 
have met certain age and service requirements to participate by electing to     
contribute up to 15% of their gross salary to the plan, as defined, with the    
Company matching 50% of a participant's contribution up to a maximum of 3% of   
gross salary. Company contributions vest after four years of employment. The    
employees' contributions are immediately vested. The Company's contribution to  
the savings plan for the years ended December 31, 2000, 1999 and 1998 was       
$135,172, 120,411 and $163,106, respectively.                                   

The Company also maintains a profit sharing plan for the benefit of its   
employees. Contributions are determined at the discretion of the Company as     
defined in the Plan Document. No contributions were made for 2000, 1999 or      
1998.                                                                           

14. Commitments and Contingencies:                                              

 In December 2000 the Company relocated the offices of its French subsidiary
in Paris, France. Under the Paris lease the subsidiary has certain future       
obligations contingent on other tenants occupying the vacated premises. As the  
Company believes that some amount related to these issues is probable,          
contingent liabilities of $50,416 were recorded as of December 31, 2000.        

In December 1998, the Company's acquired French subsidiary, (See Note 3), 
received an assessment for taxes, penalties and interest as a result of an      
audit of the subsidiary's 1995 tax return. Additional assessments have          
subsequently been received for 1996, 1997 and 1998. The subsidiary has also     
received notices of additional customs taxes and related penalties and interest 
due to the French government. The Company has contested all these assessments   
and reached a final settlement with the tax authorities in December 2000.       
During the period the assessments were contested, a contingent liability was    
recorded as the Company believed some assessment was probable. The final        
settlement amount was recorded in accounts payable at December 31, 2000. As of  
the filing date, a portion of the settlement amount has been offset against     
certain tax credits due the Company and the remainder remitted.                 

Additionally, the Company purchases certain components upon which the     
Company has developed specific products from sole source suppliers. The Company 
does not have long-term agreements with any of these                            

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

suppliers. Although the Company has not experienced any material difficulties   
in obtaining these components, any reduction or interruption in supply or       
manufacturing from these third-party contractors would adversely affect its     
ability to continue to deliver its products.                                    

The Company leases office space for its corporate headquarters under an   
operating lease which expires in January 2006. The lease provides for annual    
minimum lease payments during the first year of $379,872, increasing annually   
thereafter by $22,500. The lease also provides for the Company to pay a portion 
of common area costs as defined. The Company has two five-year options to renew 
the lease at terms as defined based upon fair market value. In addition,        
$125,000 is held in escrow to be applied to future rental payments. Such amount 
is classified as a long-term prepayment. The Company also paid a $200,000       
security deposit relating to this lease. Additionally, the Company has a lease  
on office space in Paris, France which expires December 31, 2006 and in         
Dortmund, Germany which expires December 31, 2004. The Company also has certain 
property and equipment under capital leases. Future minimum lease payments      
under all leases at December 31, 2000 are as follows:                           

                                                                [Download Table]

For the Year Ending December 31,            Operating Leases Capital Leases
--------------------------------            ---------------- --------------
                                                                           
2001.......................................       542,025        132,071   
2002.......................................       468,866         99,053   
2003.......................................       470,280            --    
2004.......................................       489,966            --    
2005.......................................       507,098            --    
Thereafter.................................        79,061            --    
                                               ----------       --------   
  Total....................................    $2,557,296        231,124   
                                               ----------                  
  Less amounts representing interest........................     (16,125)  
                                                                --------   
  Obligations under capital leases..........................     214,999   
  Less current portion......................................    (110,033)  
                                                                --------   
                                                                $104,966   
                                                                ========   

Rent expense for the years ended December 31, 2000, 1999 and 1998 was     
$629,515, $598,138, and $734,651, respectively.                                 

15. Segment Data:                                                               

In accordance with SFAS No. 131 ("Disclosures about Segments of an        
Enterprise and Related Information"), the segment information is being reported 
consistent with the Company's method of internal reporting. The Company's       
reportable segments for 2000 and 1999 were North American and European          
operations, which are a result of the acquisition of Scii (see Note 3) in 1998  
and the establishment of Ariel Deutschland, GmbH, a wholly owned German         
subsidiary in 1999. European operations were not material and did not qualify   
as a reportable segment as of December 31, 1998; therefore, there is no         
comparable segment information presented for 1998. Segment profit includes      
operating expenses directly attributable to the segment including               
administrative, selling, marketing, research and development costs and taxes.   
Certain expenses managed outside the reportable segments are excluded. The      
Company does not include intercompany transfers between segments for management 
reporting purposes.                                                             

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Summary information by segment as of and for the years ended December 31, 
2000 and 1999 is as follows:                                                    

                                                                [Download Table]

                                             For the years ended December 31,   
                                             ---------------------------------- 
                                                   2000              1999       
                                             ----------------  ---------------- 
                                                                                
     North America:                                                             
     Revenues from external customers....... $      7,564,785  $     11,229,081 
     Intersegment revenues..................           49,562            19,318 
     Net segment (loss).....................      (12,245,298)       (9,918,643)
     Interest income/(expense), net.........            3,278           (76,349)
     Segment assets.........................        8,070,360        16,759,363 
     Europe:                                                                    
     Revenues from external customers....... $        442,289  $        397,465 
     Intersegment revenues..................              -0-               -0- 
     Net segment (loss).....................       (3,396,857)       (2,577,618)
     Interest income/(expense), net.........           (3,386)          (10,785)
     Segment assets.........................        1,137,691         3,057,709 

   A reconciliation of the Company's segment losses to the corresponding        
consolidated amounts for the year ended December 31, 2000 and 1999 is as        
follows:                                                                        


                                                   2000              1999       
                                             ----------------  ---------------- 
                                                                                
     Total Segment profit/(loss)............     $(15,642,155)     $(12,496,261)
     Margins on intersegment revenues.......           (5,897)           (3,554)
                                             ----------------  ---------------- 
     Net loss...............................     $(15,648,052)     $(12,499,815)
                                             ================  ================ 

16. Share Rights Plan:                                                          

On October 15, 1998, the Board of Directors approved the declaration of a 
dividend distribution of one preferred share purchase right on each outstanding 
share of its Common Stock ("Rights"). Each Right will entitle shareholders to   
buy one one-hundredth of a share of newly created Series A Preferred Stock of   
the Company at an exercise price of $25. The Rights will be exercisable if a    
person or group acquires 15% or more of the Common Stock of the Company or      
announces a tender offer for 15% or more of the Common Stock. The Board of      
Directors will be entitled to redeem the Rights at one cent per Right at any    
time before such person acquires 15% or more of the outstanding Common Stock.   
The Rights are more fully described in the Rights Plan dated as of October 9,   
1998.                                                                           

Under the Rights Plan if a person acquires 15% or more of the outstanding 
Common Stock of the Company, each Right will entitle its holder to purchase, at 
the Right's exercise price, a number of shares of Common Stock having a market  
value at that time of twice the Right's exercise price. If the Company is       
acquired in a merger or other business combination transaction after a person   
acquires 15% or more of the Company's Common Stock, each Right will entitle its 
holder to purchase, at the Right's then-current exercise price, a number of the 
acquiring company's common shares having a market value at that time of twice   
the Right's exercise price. The Board of Directors may also exchange the Rights 
at an exchange ratio of one share of Common Stock per Right. Rights held by a   
15% holder will become void and will not be exercisable to purchase Common      
Stock, or the acquiring person's common shares, at the discounted purchase      
price, and will not be available for each exchange.                             

The dividend distribution will be payable to shareholders of record as of 
the close of business on October 9, 1998. The Rights will expire in ten years.  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

17. Related Party Transactions:                                                 

Legal                                                                         

The Company's outside legal counsel owns shares of the Company's common   
stock and is a member of the Company's Board of Directors. Total legal fees     
paid to this outside attorney for the years ended December 31, 2000, 1999 and   
1998 were approximately $113,000, $120,000 and $124,000, respectively.          

Management Advisory Services                                                  

 A director and former executive officer of the Company performed management
consulting services consisting primarily of supporting our efforts to raise     
additional capital in the years ended December 31, 2000 and 1999. Fees received 
for those services were $25,000 and $54,166 for the years ended December 31,    
2000 and 1999, respectively. Effective May 11, 2000 that director was employed  
by the company at an annual salary of $120,000. Total compensation paid to him  
during 2000 was $62,555.                                                        

A director of the Company provided management advisory services to the    
Company since 1995. Fees incurred for the year ended December 31, 1998 were     
approximately $450,000. In December 1998, the Company entered into a            
termination agreement with this director. As a result, no such fees were        
incurred in 1999 or 2000.                                                       

In addition, this director received a stock option grant of 80,000 options
for management advisory services. That grant is dated December 31, 1998 and     
vested at the grant date. These fees are in addition to fees received for       
management advisory services rendered for the sale of the Company's CSG unit as 
disclosed in note 8. This director also had an outstanding receivable of        
$100,000 to the Company as of December 31, 1998. This amount was repaid to the  
Company in January 1999.                                                        

Investment Banking Services                                                   

A former director of the Company had provided investment banking advisory 
services to the Company since 1996. Fees and expenses incurred for the years    
ended December 31, 1999 and 1998 were approximately $22,000 and $156,200,       
respectively. No such fees were incurred for the year ended December 31, 2000.  
In addition, this director received a stock option grant of 40,000 options      
dated July 30, 1996 that vested 25% on July 30, 1996, 25% July 30, 1997 and 50% 
July 30, 1998 as well as an additional stock grant of 40,000 options dated May  
1, 1997 that vested 50% on the effective date and 50% on May 1, 1998. These     
fees are in addition to fees received for management advisory services rendered 
for the sale of the Company's CSG unit as disclosed in note 8.                  

Program Management Services                                                   

 In February 1999, the Company entered into a consulting agreement with GIOS
Incorporated to advise our senior management in connection with the             
installation of new product development process capabilities, including         
assessing process issues and providing strategic decision support on an as      
needed basis. GIOS was co-founded in September 1998 by Dennis Schneider, our    
CEO and President. The agreement provides that Mr. Schneider will represent     
only our interests during the course of the consulting relationship.            
Compensation to GIOS under the agreement is $2,000 per day, three days per week 
for the first month of the agreement, and $1,750 per day for the remainder of   
the relationship, with specific time commitments to be negotiated by the        
parties. Under this agreement the Company paid GIOS approximately $12,485 and   
$162,000, for the years ended December 31, 2000 and 1999, respectively.         

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

 A director and former executive officer of the Company performed management
consulting services consisting primarily of sales consulting in the year ended  
December 31, 2000. Fees received for those services were approximately          
$137,000.                                                                       

18. Stock Purchase Agreement:                                                   

 On February 24, 2000 the Company entered into an agreement with a number of
investors to sell 2,151,000 shares of our common stock at a purchase price of   
$4.00 per share in a private placement. The Company also issued 2,151,000       
warrants to purchase common stock with an exercise price of $6.875. The         
warrants are exercisable as of September 1, 2000. The exercise price of the     
warrants was reset to $.95 on March 1, 2001 based on the average market price   
for the five trading days preceding the one year anniversary date of the        
agreement. Under the terms of the agreement, the Company filed a registration   
statement to register the shares sold and those underlying the warrants. That   
registration statement was declared effective on April 20, 2000.                

  The agreement also calls for the issuance of additional shares at no cost to
these investors should the Company sell shares of common stock, or securities   
convertible into common stock, at a price less than $4.00 per share within      
twenty four months of this agreement. This provision requires the Company to    
issue additional shares such that the average share price of these investors is 
equal to the then offered price. Additionally, for twenty-four months from the  
date of the agreement, these investors have the right of first refusal to       
participate in any future sales of our common stock, or securities convertible  
into common stock, under the terms then offered.                                

19. Stock Option and Restricted Stock Awards:                                   

The 1992 Stock Option and Restricted Stock Plan                               

  During 1992, the Board of Directors approved and stockholders of the Company
ratified the adoption of the 1992 Stock Option and Restricted Stock Plan (the   
"1992 Plan"). The 1992 Plan provided for a maximum of 600,000 shares of the     
Company's common stock to be issued to employees, directors and consultants, as 
defined in connection with stock option grants ("Options") or restricted stock  
awards ("Awards").                                                              

During 1994, the Company granted, from the 1992 Plan, a total of 268,875  
Options which entitle the holders to acquire an equal number of shares of the   
Company's common stock at an exercise price per share of $2.27 or $2.45. The    
Options vest over a four-year period.                                           

Effective October 31, 1994, the Board terminated the 1992 Plan and,       
accordingly, no additional Options or Awards will be issued from the 1992 Plan. 
As of December 31, 2000, 22,625 options remain outstanding.                     

The 1994 Stock Option Plan                                                    

 During 1994, the Board of Directors (the "Board") approved and stockholders
of the Company ratified the adoption of the 1994 Stock Option Plan (the "1994   
Plan"). The 1994 Plan provides for a maximum of 500,000 shares of the Company's 
common stock to be issued to employees, directors and consultants               
("employees"), as defined, in connection with stock option grants ("Stock       
Options"). Stock Options will be granted by the Board or a committee appointed  
by the Board ("the Committee"). Each Stock Option will entitle the holder to    
acquire an equal number of shares of common stock at an exercise price equal to 
the fair market value of the common stock on the date of grant as determined by 
the Committee (110% of the fair market value for an employee who owns 10% or    
more of the Company as defined). The Committee will determine the Stock Option  
vesting period and expiration date not to exceed ten years from the date the    
Stock Option was granted. The 1994 Plan                                         

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

contains a provision whereby an employee, at the discretion of the Committee,   
may receive a loan from the Company in order to exercise their Stock Options.   
The 1994 Plan also provides for the Committee, at its discretion, to accelerate 
the vesting of all outstanding Stock Options so that they become fully and      
immediately exercisable. During October 1994, the Company granted, from the     
1994 Plan, 150,000 Stock Options to three members of the Company's Advisory     
Board. Each Stock Option entitles the holder to acquire one share of the        
Company's common stock at exercise prices, per share, of $2.45 for 75,000 Stock 
Options and $6.00 for the remaining 75,000. The Advisory Board Stock Options    
are immediately exercisable and expire three years from the date of grant. In   
connection with the Company's initial public offering, the underwriting         
agreement entered into in connection therewith prohibits the Company from       
granting future Stock Options at an exercise price below $4.00.                 

All other outstanding options vest over periods ranging from immediate to 
four years and expire in ten years. At December 31, 2000, 1,200 options remain  
outstanding.                                                                    

The 1995 Stock Option Plan                                                    

  The Company adopted its 1995 Incentive Stock Option Plan ("Plan"), which was
approved by the Company's stockholders at the annual meeting of stockholders on 
May 14, 1996. The stockholders ratified an amendment to the Plan at the 1997    
annual meeting of stockholders held on June 13, 1997, increasing the number of  
shares issuable under the Plan from 600,000 to 1,200,000. On June 24, 1998, the 
stockholders ratified an amendment to the Plan , increasing the number of       
shares issuable under the Plan from 1,200,000 to 1,700,000. On June 23, 1999,   
the stockholders ratified another amendment to the Plan, increasing the number  
of shares issuable under the Plan from 1,700,000 to 2,200,000.                  

The Board believes that the Plan is desirable to attract and retain       
executives and other key employees of outstanding ability. Under the Plan,      
options to purchase an aggregate of not more than 2,200,000 shares of the       
Company's common stock may be granted.                                          

At various times during 2000, the Company granted a total of 1,042,250    
options which entitles the holder to acquire an equal number of shares of the   
Company's common stock at exercise prices ranging from $1.13 to $8.19. The      
options vest over periods ranging from immediate up to four years and expire in 
ten years. At December 31, 2000, 1,306,699 options remain outstanding.          

The Plan is administered by the Board of Directors. The Board is generally
empowered to interpret the Plan, prescribe rules and regulations relating       
thereto, determine the terms of the option agreements, amend them with the      
consent of the optionee, determine the employees to whom options are to be      
granted, and determine the number of shares subject to each option and the      
exercise price thereof. The per-share exercise price for incentive stock        
options ("ISO") and for non-qualified stock options ("NQSO") will not be less   
than the greater of $4.00 per share or 100% of the fair market value of a share 
of the common stock on the date the option is granted (110% of fair market      
value on the date of grant of an ISO if the optionee owns more than 10% of the  
common stock of the Company). Upon exercise of an option, the optionee may pay  
the exercise price with previously acquired securities of the Company, or at    
the discretion of the Board, the Company may loan some or all of the purchase   
price to the optionee.                                                          

Options will be exercisable for a term determined by the Board, which will
not be greater than ten years from the date of grant. Options may be exercised  
only while the original grantee has a relationship with the Company which       
confers eligibility to be granted options or within three months after          
termination of such relationship with the Company, or up to one year after      
death or total and permanent disability. In the event of the termination of     
such relationship between the original grantee and the Company for cause (as    
defined in the                                                                  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Plan), all options granted to that original optionee terminate immediately. In  
the event of certain basic changes in the Company, including a change in        
control of the Company (as described in the Plan), in the discretion of the     
Committee each option may become fully and immediately exercisable. ISOs are    
not transferable other than by will or the laws of descent and distribution.    
NQSOs may be transferred to the optionee's spouse or lineal descendants,        
subject to certain restrictions. Options may be exercised during the holder's   
lifetime only by the holder, his or her guardian or legal representative.       

Options granted pursuant to the Plan may be designated as ISOs, with the  
attendant tax benefits provided under Section 421 and 422 of the Internal       
Revenue Code of 1986. Accordingly, the Plan provides that the aggregate fair    
market value (determined at the time an ISO is granted) of the common stock     
subject to ISOs exercisable for the first time by an employee during the        
calendar year (under all plans of the Company and its subsidiaries) may not     
exceed $100,000. The Board may modify, suspend or terminate the Plan; provided, 
however, that certain material modifications affecting the Plan must be         
approved by the stockholders, and any change in the Plan must be approved by    
the stockholders, and any change in the Plan that may adversely affect an       
optionee's rights under an option previously granted under the Plan requires    
the consent of the optionee.                                                    

Non-Plan Options                                                              

 During 2000, the Company granted 311,500 stock options to certain employees
and outside consultants. Such options were issued outside the 1995 Plan and     
entitle the holders thereof to acquire an equal number of shares of the         
Company's common stock at exercise prices ranging from $2.75 to $7.81. Such     
options vest over periods ranging from immediate to four years and expire in    
ten years. At December 31, 2000, a total of 951,752 non-plan options remain     
outstanding.                                                                    

The 1996 Directors Plan                                                       

  The 1996 Directors Plan was adopted by the Board of Directors on January 24,
1996 and approved by the stockholders of the Company at the annual meeting of   
stockholders held May 14, 1996. The stockholders ratified an amendment to the   
Plan at the 1998 annual meeting of stockholders held on June 24, 1998,          
increasing the number of shares issuable under the Plan from 250,000 to         
450,000. The Plan is administered by a committee appointed by the Board of      
Directors. The Plan is effective for a period of ten years from the date it was 
adopted. The Plan is not subject to any provisions of the Employee Retirement   
Income Security Act of 1974 ("ERISA").                                          

421,000 options have been granted pursuant to the 1996 Directors Plan to  
date. The ability of a grantee to purchase the common stock under the 1996 plan 
is terminated if his or her service with the Company is terminated, provided    
that in certain circumstances the grantee or his estate will have the right to  
purchase the common stock after termination of service for a limited period of  
time. The right to acquire common stock is not transferable except in the       
circumstances of death. In the event that a reorganization, merger,             
consolidation, reclassification, recapitalization or capital adjustment         
including a stock dividend or other similar change in the common stock of the   
Company, equitable adjustment shall be made by the Company in the number and    
kind of shares that may be acquired under the 1996 Directors Plan. Common stock 
that may be acquired under the 1996 Directors Plan may be acquired by the       
surrender of other shares of common stock owned by the employee or the          
surrender of an unexercised portion of the right to acquire common stock under  
the 1996 Directors Plan.                                                        

The Company applies APB No.25, "Accounting for Stock Issued to Employees",
and related interpretations for stock options issued to employees in accounting 
for its stock option plans. Accordingly, no compensation expense has been       
recognized for the Company's stock-based compensation plans other than for      
stock options granted to outside consultants. During 1998, the Company recorded 
a total of approximately                                                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

$302,275 of compensation related to options granted to consultants. These       
amounts are being amortized over the period of benefit, resulting in a $413,094 
charge to operations for the year ended December 31, 1998. No such charges were 
recorded during 2000 or 1999. The exercise price for all stock options issued   
to employees and non-employees during 2000, 1999 and 1998 was equal to the      
market price of the Company's stock at the date of grant.                       

The Company has adopted the disclosure-only provisions of SFAS No. 123,   
"Accounting for Stock-Based Compensation." Had compensation cost for the        
Company's stock options issued to employees been determined based upon the fair 
value at the grant date for stock options issued under these plans pursuant to  
the methodology prescribed under SFAS No. 123, the Company's basic and diluted  
earnings/(loss) per share would have been adjusted, as shown in the table       
below. The weighted average fair value of stock options granted to employees    
used in determining the pro forma amounts is estimated using the Black-Scholes  
option-pricing model for the pro forma amounts with the following weighted      
average assumptions:                                                            

                                                                [Download Table]

                                         For the years ended December 31,      
                                       --------------------------------------- 
                                           2000          1999         1998     
                                       ------------  ------------  ----------- 
                                                                               
   Risk-free interest rate............         4.62%         6.08%        4.70%
   Expected life......................    4.0 years     3.4 years    4.1 years 
   Expected volatility................          122%           86%          80%
   Expected dividends.................         None          None         None 

   Net income/(loss) and basic and diluted earnings/(loss) per share as        
reported, and on a pro forma basis as if compensation cost had been determined 
on the basis of fair value pursuant to SFAS No. 123 is as follows:             


                                         For the years ended December 31,      
                                       --------------------------------------- 
                                           2000          1999         1998     
                                       ------------  ------------  ----------- 
                                                                               
   Net income/(loss):                                                          
    As reported....................... $(15,648,052) $(12,499,815) $12,076,506 
    Pro forma......................... $(18,109,977) $(11,776,096) $ 9,285,433 
   Basic Earnings/(Loss) per share:                                            
    As reported.......................       $(1.23)       $(1.27)       $1.25 
    Pro forma.........................       $(1.42)       $(1.20)       $0.96 
   Diluted Earnings/(Loss) per share:                                          
    As reported.......................       $(1.23)       $(1.27)       $1.11 
    Pro forma.........................       $(1.42)       $(1.20)       $0.86 

Pro forma amounts reflect options granted after 1994 and are not likely to
be representative of amounts in future years, as additional options are awarded 
and vested.                                                                     

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

For the three years ended December 31, 2000, option activity for the plans
was as follows:                                                                 

                                                                [Download Table]

                                          Weighted   
                                          Average    
                            Options    Exercise Price
                           ----------  --------------
                                                     
Stock options outstanding                            
 at December 31, 1997.....  2,076,175       6.35     
  Granted.................  2,697,300       3.82     
  Forfeited............... (1,568,375)      6.29     
  Exercised...............   (425,900)      4.32     
                           ----------       ----     
Stock options outstanding                            
 at December 31, 1998.....  2,779,200       4.24     
  Granted.................    687,752       3.16     
  Forfeited...............   (712,275)      5.45     
  Exercised...............   (866,364)      4.31     
                           ----------       ----     
Stock options outstanding                            
 at December 31, 1999.....  1,888,313       3.37     
  Granted.................  1,636,250       3.33     
  Forfeited...............   (808,787)      3.37     
  Exercised...............    (85,000)      2.95     
                           ----------       ----     
Stock options outstanding                            
 at December 31, 2000.....  2,630,776       3.35     

The weighted average fair value of options granted during 2000, 1999 and  
1998 was $3.33, $3.06, and $2.10, respectively.                                 

The following table summarizes information about the outstanding and      
exercisable stock options at December 31, 2000:                                 

                                                        [Enlarge/Download Table]

                                                                         Stock Options      
                                  Stock Options Outstanding               Exercisable       
                          ----------------------------------------- ------------------------
                                       Weighted    Weighted Average              Weighted   
                                       Average        Remaining                  Average    
Range of Exercise Prices   Shares   Exercise Price Contractual Life  Shares   Exercise Price
------------------------  --------- -------------- ---------------- --------- --------------
                                                                                            
$1.13 to $2.44..........    878,251     $2.20         8.6 years       667,251     $2.31     
$2.45 to $3.81..........  1,277,376     $3.46         9.1 years       457,576     $3.27     
$3.94 to $10.63.........    475,149     $5.17         7.6 years       363,775     $5.37     
                          ---------                                 ---------               
                          2,630,776                                 1,488,602               

20. Subsequent Event                                                            

On March 28, 2001 the Company entered into a definitive agreement and plan
of merger with MAYAN Networks which upon consummation requires us to, among     
other things, effect a reverse stock split and to issue additional shares to    
MAYAN's shareholders immediately after the reverse stock split. Upon            
consummation of the transaction MAYAN shareholders will control approximately   
90% of the Company's outstanding voting stock.                                  

The consummation of the transaction requires, among other things, the     
approval of the plan of merger by shareholders of both companies, the filing of 
a registration statement with the Securities and Exchange Commission on Form S- 
4, the effectiveness of the shares to be issued in that filing and the listing  
of those shares with NASDAQ.                                                    

The agreement and plan of merger also provides for a Promissory Note (the 
"Note") which calls for MAYAN Networks to provide up to $2 million in debt      
financing to the Company on an as needed basis until the transaction is         
consummated or otherwise terminated. In the event MAYAN chooses to terminate    
the merger agreement due to a superior offer, the note becomes a term note with 
any principal and accrued interest payable                                      

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

on the one year anniversary of the termination. The Company must maintain       
certain representations and warranties and not be in breach of the covenants of 
the agreement and plan of merger to draw down funds against the Note. The Note  
has an annual interest rate of 8% and requires the Company to execute a         
subordinated security agreement.                                                

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CONSOLIDATED BALANCE SHEETS 
(Unaudited) 

                                                                [Download Table]

                                                     March 31,    December 31, 
                                                        2001          2000     
                                                    ------------  ------------ 
                                                                               
ASSETS                                                                         
Current assets:                                                                
  Cash and cash equivalents........................ $    423,477  $  1,129,246 
  Accounts receivable, net of allowance for                                    
   doubtful accounts of $547,715 in 2001 and                                   
   $644,706 in 2000................................      421,939     2,077,581 
  Other receivables................................      209,448       240,082 
  Inventories, net.................................    2,279,477     2,559,260 
  Prepaid expenses.................................      482,957       495,859 
                                                    ------------  ------------ 
    Total current assets...........................    3,817,298     6,502,028 
Equipment, net of accumulated depreciation and                                 
 amortization......................................    1,058,656     1,261,112 
Other assets.......................................      673,891     1,444,911 
                                                    ------------  ------------ 
    Total assets................................... $  5,549,845  $  9,208,051 
                                                    ============  ============ 
LIABILITIES & STOCKHOLDERS' EQUITY/(DEFICIT)                                   
Current liabilities:                                                           
  Accounts payable................................. $  1,661,925  $  1,705,696 
  Accrued expenses.................................    1,800,652     1,688,971 
  Notes payable--current portion of long-term                                  
   debt............................................      886,126       520,263 
  Current portion of capital-lease obligation......      110,033       110,033 
  Royalties payable................................       91,210        91,210 
                                                    ------------  ------------ 
      Total current liabilities....................    4,549,946     4,116,173 
Capital-lease obligation, net of current portion...       76,059       104,966 
Notes payable--long term...........................    1,066,922     1,268,721 
Stockholders' equity                                                           
  Preferred stock, $.001 par value:                                            
    Authorized--2,000,000 shares issued and                                    
     outstanding--none.............................                            
  Common stock, $.001 par value:                                               
    Authorized--20,000,000 shares issued and                                   
     outstanding--13,073,920 at March 31, 2001 and                             
     December 31, 2000.............................       13,074        13,074 
  Additional paid-in capital.......................   46,436,667    46,436,667 
  Unrealized losses--foreign currency translation                              
   adjustment......................................     (958,245)     (945,806)
  Accumulated deficit..............................  (45,634,578)  (41,785,744)
                                                    ------------  ------------ 
    Total stockholders' equity/(deficit)...........     (143,082)    3,718,191 
                                                    ------------  ------------ 
      Total liabilities & stockholders'                                        
       equity/(deficit)............................ $  5,549,845  $  9,208,051 
                                                    ============  ============ 

The accompanying notes are an integral part of the financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSES
(Unaudited) 

                                                                [Download Table]

                                                        Three Months Ended     
                                                             March 31,         
                                                      ------------------------ 
                                                         2001         2000     
                                                      -----------  ----------- 
                                                                               
Sales................................................ $   881,656  $ 2,072,221 
Cost of goods sold...................................     625,508      868,374 
                                                      -----------  ----------- 
    Gross profit.....................................     256,148    1,203,847 
Expenses:                                                                      
  Sales and marketing................................   1,064,854    1,266,834 
  General and administrative.........................   1,935,011    1,468,396 
  Research and development...........................   1,090,516    1,281,626 
                                                      -----------  ----------- 
    Total operating expenses.........................   4,090,380    4,016,856 
                                                      -----------  ----------- 
  Loss from operations...............................  (3,834,232)  (2,813,009)
Interest income......................................       7,269      110,918 
Interest expense.....................................     (67,167)    (110,133)
Other income/(expense)...............................      45,296         (753)
                                                      -----------  ----------- 
    Net loss.........................................  (3,848,834)  (2,812,977)
                                                      -----------  ----------- 
    Other comprehensive loss, net of tax foreign                               
     currency translation adjustments................     (12,439)    (147,268)
                                                      -----------  ----------- 
      Comprehensive loss............................. $(3,861,273) $(2,960,245)
                                                      ===========  =========== 
Basic and diluted loss per share..................... $     (0.29) $     (0.24)
                                                      ===========  =========== 

The accompanying notes are an integral part of the financial statements.

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ARIEL CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Unaudited) 

                                                                [Download Table]

                                                      For The Three Months    
                                                        Ended March 31,       
                                                    ------------------------- 
                                                       2001          2000     
                                                    -----------  ------------ 
                                                                              
Cash flows from operating activities:                                         
Net Loss........................................... $(3,848,834) $ (2,812,977)
Adjustments to reconcile net loss to net cash used                            
 in operating activities:                                                     
  Depreciation and amortization....................     203,529       243,905 
  Amortization of goodwill & intangibles...........      49,112       233,467 
  Amortization of debt issuance costs..............      69,746        67,953 
  Provision/(recovery) for doubtful accounts.......      12,956        (1,793)
  Provision for inventory obsolescence.............      45,000        91,659 
  Non-cash compensation expense....................      59,878           --  
(Increase) decrease in assets:                                                
  Accounts receivable..............................   1,757,033     1,119,738 
  Other receivables................................    (115,539)     (122,392)
  Inventories......................................     240,678       105,548 
  Other assets.....................................    (111,539)     (251,209)
Increase (decrease) in liabilities:                                           
  Accounts payable and accrued expenses............     134,558    (2,340,170)
                                                    -----------  ------------ 
  Net cash used in operating activities............  (1,503,422)   (3,666,271)
                                                    -----------  ------------ 
Cash flows from investing activities:                                         
  Purchase of equipment............................      (3,620)     (320,896)
  Purchase of investments..........................    (220,000)          --  
  Proceeds from maturity of investments............     350,000           --  
  Purchase price adjustment........................     564,430           --  
                                                    -----------  ------------ 
    Net cash provided by (used in) investing                                  
     activities....................................     690,810      (320,896)
                                                    -----------  ------------ 
Cash flows from financing activities:                                         
  Principal payments on capital lease obligation...     (28,907)      (25,593)
  Principal payments on long-term debt.............    (163,752)     (204,183)
  Proceeds from bridge-loan........................     300,000           --  
  Proceeds from issuance of common stock, net......         --      8,242,142 
  Proceeds from exercise of common stock options                              
   and warrants....................................         --         10,063 
                                                    -----------  ------------ 
    Net cash provided by financing activities......     107,341     8,022,429 
                                                    -----------  ------------ 
Effect of exchange rate changes on cash and cash                              
 equivalents.......................................        (498)       (1,166)
Net (decrease)/increase in cash and cash                                      
 equivalents.......................................    (705,769)    4,034,096 
    Cash and cash equivalents, beginning of                                   
     period........................................   1,129,246     7,088,431 
                                                    -----------  ------------ 
Cash and cash equivalents, end of period........... $   423,477  $ 11,122,527 
                                                    ===========  ============ 

The accompanying notes are an integral part of the financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 

1. Basis of Presentation                                                        

 The financial statements included herein have been prepared by the Company,
pursuant to the Rules and Regulations of the Securities and Exchange            
Commission. Certain information and footnote disclosures normally included in   
financial statements prepared in accordance with generally accepted accounting  
principles have been condensed or omitted pursuant to such rules and            
regulations. The Company believes, however, that the disclosure contained       
herein is adequate to make the information presented not misleading. The        
financial statements should be read in conjunction with the financial           
statements and notes thereto included in the Company's Form 10-K for the year   
ended December 31, 2000.                                                        

 As of March 31, 2001, the Company had negative working capital of $732,648,
including cash and cash equivalents of $423,477. The Company has incurred       
substantial operating losses and had an accumulated deficit of $45,662,779 as   
of March 31, 2001. The Company has incurred net losses of approximately $15.6   
million and $12.5 million for the years ended December 31, 2000 and 1999,       
respectively, and $3.8 million for the three months ended March 31, 2001 and    
expects to incur costs and expenses in excess of revenues as it continues to    
execute its business strategy in the ISP and OEM markets. Absent the pending    
transaction with MAYAN Networks Corporation described below and in Note 20 to   
the financial statements included in its Annual Report on Form 10-K for the     
year ended December 31, 2000, (which is contingent upon a number of factors),   
the Company has limited financial resources available to support its ongoing    
operations, fund product development programs to develop and market new         
competitive remote access technology, and pay its obligations as they become    
due.                                                                            

These factors raise substantial doubt concerning the Company's ability to 
continue as a going concern. The consolidated financial statements do not       
include any adjustments relating to the recoverability and classification of    
asset carrying amounts or the amount and classification of liabilities that     
might result should the Company be unable to continue as a going concern. The   
Company's ability to continue as a going concern is dependent upon the          
consummation of the pending transaction with MAYAN Networks Corporation as      
described below in Note 5, the ongoing support of its stockholders, creditors,  
and certain key customers, and/or its ability to successfully develop and       
market its remote access products and technology at economically feasible       
levels in a highly competitive and rapidly changing technology environment.     

As discussed in Note 5, the Company has a pending transaction with MAYAN  
Networks Corporation which the Company believes, if consummated, will provide   
adequate financial resources to support the Company through March 2002. There   
is no assurance, however, that the Company will be able to close the pending    
transaction or that such financial resources provided by the pending            
transaction, if closed, will be sufficient to support the Company until it      
reaches a successful level of operations.                                       

 In the opinion of the management of the Company, the accompanying unaudited
financial statements contain all adjustments, consisting of normal recurring    
accruals, necessary to present fairly the financial position of the Company as  
of March 31, 2001 and the results of operations for the three months ended      
March 31, 2001 and 2000. The results for interim periods are not necessarily    
indicative of results for the full year.                                        

2. Inventories, net of allowance:                                               

Inventories, net of allowance, consists of the following:                 

                                                                [Download Table]

                                                    March 31,  December 31,
                                                       2001        2000    
                                                    ---------- ------------
                                                                           
Component Materials................................ $  260,276  $  556,429 
Work-in process....................................    353,504     557,632 
Finished Goods.....................................  1,665,697   1,445,199 
                                                    ----------  ---------- 
                                                    $2,279,477  $2,559,260 
                                                    ==========  ========== 

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 
(Unaudited) 

3. Debt                                                                         

 As of March 31, 2001 the Company had total debt of $1,953,048 consisting of
a Term Note due to Transamerica Business Credit Corporation of $1,653,048 and a 
bridge loan due to MAYAN Networks of $300,000. As of March 31, 2001 outstanding 
debt of $1,653,048 remained on the Term Note payable quarterly in arrears over  
twenty consecutive quarters commencing October 1, 1997. The interest rate in    
effect on the term loan at March 31, 2000 was 12.10%.                           

  The Transamerica credit agreement includes a material adverse effect clause,
whereby Transamerica can accelerate the due date of the loan if certain changes 
in conditions (financial or otherwise) are deemed to have a material adverse    
effect on the Company's ability to meet its obligations. The Company believes   
it is in compliance with this provision and Transamerica has not communicated   
to the Company that a material adverse effect has occurred.                     

On March 28, 2001, the Company entered in an agreement with MAYAN Networks
(see Note 5) which, among other things, provides for a Promissory Note (the     
"Note"). The Note calls for MAYAN Networks to provide up to $2 million in debt  
financing to the Company on an as needed basis until the transaction is         
consummated or otherwise terminated. In the event MAYAN chooses to terminate    
the merger agreement due to a superior offer, the note becomes a term note with 
any principal and accrued interest payable on the one year anniversary of the   
termination. Should the merger agreement otherwise terminate amounts due on the 
Note would be due and payable upon termination.                                 

The Company must maintain compliance with certain representations and     
warranties and not be in breach of the covenants of the merger agreement to     
draw down funds against the Note. The Note has an annual interest rate of 8%    
and is secured by subordinated security agreements on the Company's tangible    
assets and intellectual property.                                               

 The Company had drawn down $300,000 as of March 31, 2001. As of the May 21,
2001 there is a total of $2,000,000 outstanding.                                

4. Segment Data                                                                 

Segments are comprised of European and North American operations. The     
accounting policies of the segments are the same as those described in the      
"Summary of Significant Accounting Policies" in Note 1 of the Company's         
financial statements included in its Annual Report on Form 10-K for the year    
ended December 31, 2000. Segment profit includes operating expenses directly    
attributable to the segment including administrative, selling, marketing,       
research and development costs and taxes. Certain expenses managed outside the  
reportable segments are excluded. Costs excluded from segment profit include    
charges for in-process technology and costs related to mergers and              
acquisitions. The Company does not include intercompany transfers between       
segments for management reporting purposes.                                     

Summary information by segment as of and for the three months ended March 
31:                                                                             

                                                                [Download Table]
                                                                            
North America:                                                              

For the three months ended and as of:          March 31, 2001 March 31, 2000
-------------------------------------          -------------- --------------
                                                                            
  Revenues from external customers............  $   829,922    $ 1,954,617  
  Segment profit loss.........................   (3,580,880)    (2,579,509) 
  Segment assets..............................    5,016,204     19,725,473  

Europe:                                                                     

For the three months ended and as of:          March 31, 2001 March 31, 2000
-------------------------------------          -------------- --------------
                                                                            
  Revenues from external customers............  $    51,734    $   117,604  
  Segment loss................................     (267,954)      (233,468) 
  Segment assets..............................      533,641      2,562,314  

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ARIEL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 
(Unaudited) 

5. Merger Agreement                                                             

On March 28, 2001 the Company entered into a definitive agreement and plan
of merger with MAYAN Networks Corporation of San Jose, California which upon    
consummation requires the Company to, among other things, effect a reverse      
stock split and to issue additional shares to MAYAN's shareholders immediately  
after the reverse stock split. Upon consummation of the transaction MAYAN       
shareholders will control approximately 90% of the Company's outstanding voting 
stock.                                                                          

The merger will be accounted for under the purchase method. Because MAYAN 
will own approximately 90% of the common stock of Ariel (on a diluted basis)    
after the merger, the merger will be accounted for as a reverse acquisition     
which results in MAYAN being the acquirer of Ariel for accounting purposes.     

The consummation of the transaction requires, among other things, the     
approval of the plan of merger by shareholders of both companies, the filing of 
a registration statement with the Securities and Exchange Commission on Form S- 
4, the effectiveness of the shares to be issued in that filing and the listing  
of those shares on the NASDAQ National Market.                                  

The Company expects to complete the transaction by August 31, 2001.       

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors of                                                    
MAYAN Networks Corporation:                                                     

We have audited the accompanying balance sheets of MAYAN Networks         
Corporation (the Company), a development stage company, as of June 30, 1999 and 
2000 and the related statements of operations, shareholders' equity             
(deficiency) and comprehensive loss, and of cash flows for the period from July 
30, 1997 (inception) through June 30, 1998, and the years ended June 30, 1999   
and 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 of America. 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, such financial statements present fairly, in all material 
respects, the financial position of the Company at June 30, 1999 and 2000, and  
the results of its operations and its cash flows for the periods stated above   
in conformity with accounting principles generally accepted in the United       
States of America.                                                              

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the         
financial statements, the Company's operating losses since inception raise      
substantial doubt about its ability to continue as a going concern.             
Management's plans concerning these matters are also described in Note 1. The   
financial statements do not include any adjustments that might result from the  
outcome of these uncertainties.                                                 

DELOITTE & TOUCHE LLP                                                           

San Jose, California                                                            
September 26, 2000                                                              

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

BALANCE SHEETS
(In thousands, except share amounts)

                                                                [Download Table]

                                                                       Pro Forma
                                            June 30,                   March 31,
                                        ------------------  March 31,    2001   
                                          1999      2000      2001     (Note 1) 
                                        --------  --------  ---------  ---------
                                                                (unaudited)     
                                                                                
                ASSETS                                                          
Current assets:                                                                 
 Cash and cash equivalents............. $ 10,050  $ 21,928  $ 52,183            
 Short-term investments................    7,431    16,765    15,102            
 Prepaid expenses and other current                                             
  assets...............................      120       729     1,064            
                                        --------  --------  --------   -------- 
   Total current assets................   17,601    39,422    68,349            
Property and equipment, net............      721     4,364     5,599            
Restricted cash........................      --        799       824            
Subordinated debt issuance costs.......      --        --      4,356            
Other assets...........................      123       445     2,237            
                                        --------  --------  --------   -------- 
   Total assets........................ $ 18,445  $ 45,030  $ 81,365            
                                        ========  ========  ========   ======== 

 LIABILITIES AND SHAREHOLDERS' EQUITY                                           
              (DEFICIENCY)                                                      
Liabilities:                                                                    
 Accounts payable...................... $    783  $  6,389  $  3,835            
 Accrued compensation and related                                               
  benefits.............................      202       463       406            
 Other accrued liabilities.............      273       230     2,640            
 Current portion of long-term debt                                              
  obligations..........................      339       453       441            
                                        --------  --------  --------            
   Total current liabilities...........    1,597     7,535     7,322            
5.25% Convertible subordinated notes...      --        --     78,295            
Long-term debt obligations.............      799       523       203            
Deferred rent..........................      --        250       323            
Commitments and contingencies (Notes 6                                          
 and 12)                                                                        
Shareholders' equity (deficiency):                                              
 Convertible preferred Series A stock,                                          
  $0.0001 par value, 1,907,500 shares                                           
  authorized, issued and outstanding                                            
  in 1999, 2000 and March 31, 2001 and                                          
  none pro forma (liquidation                                                   
  preference $1,526)...................    1,509     1,509     1,509   $    --  
 Convertible preferred Series B stock,                                          
  $0.0001 par value, 7,843,137 shares                                           
  authorized, issued and outstanding                                            
  in 1999, 2000 and March 31, 2001 and                                          
  none pro forma (liquidation                                                   
  preference $8,000)...................    7,554     7,554     7,554        --  
 Convertible preferred Series C stock,                                          
  $0.0001 par value, 11,826,647 shares                                          
  authorized; shares issued and                                                 
  outstanding: 11,826,346 in 1999,                                              
  2000 and March 31, 2001 and none pro                                          
  forma (liquidation preference                                                 
  $19,750).............................   19,694    19,694    19,694        --  
 Convertible preferred Series D stock,                                          
  $0.0001 par value, 14,423,077 shares                                          
  authorized; shares issued and                                                 
  outstanding: none in 1999 and                                                 
  14,423,077 in 2000 and March 31,                                              
  2001 and none pro forma (liquidation                                          
  preference $60,000)..................      --     59,969    59,969        --  
 Common stock, $0.0001 par value,                                               
  shares authorized: 60,000,000 in                                              
  1999 and 2000 and 65,000,000 on                                               
  March 31, 2001; shares issued and                                             
  outstanding: 3,644,063 in 1999 and                                            
  9,738,937 in 2000, 10,606,410 on                                              
  March 31, 2001 and 46,606,470 pro                                             
  forma................................      121     6,257    15,612    104,338 
 Notes receivable from shareholders....      --       (730)   (1,053)    (1,053)
 Deferred stock compensation...........      --     (3,827)   (8,699)    (8,699)
 Accumulated other comprehensive                                                
  income (loss)........................      (20)      (38)       47         47 
 Deficit accumulated during                                                     
  development stage....................  (12,809)  (53,666)  (99,411)   (99,411)
                                        --------  --------  --------   -------- 
   Total shareholders' equity                                                   
    (deficiency).......................   16,049    36,722    (4,778)  $ (4,778)
                                        ========  ========  ========   ======== 
   Total liabilities and shareholders'                                          
    equity (deficiency)................ $ 18,445  $ 45,030  $ 81,365            
                                        ========  ========  ========   ======== 

See notes to financial statements.

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

                                                        [Enlarge/Download Table]

                         Period from                                                      
                          July 30,                                                        
                            1997                                              Period from 
                         (Inception) Years Ended June    Nine Months Ended   July 30, 1997
                           Through          30,              March 31,        (Inception) 
                          June 30,   ------------------  ------------------  Through March
                            1998       1999      2000      2000      2001      31, 2001   
                         ----------- --------  --------  --------  --------  -------------
                                                            (unaudited)      (Cumulative) 
                                                                              (unaudited) 
                                                                                          
Operating expenses:                                                                       
  Research and                                                                            
   development                                                                            
   (exclusive of noncash                                                                  
   compensation expense)                                                                  
   .....................   $  292    $ 10,676  $ 34,516  $ 18,041  $ 23,959    $ 69,443   
  Sales and marketing                                                                     
   (exclusive of noncash                                                                  
   compensation                                                                           
   expense).............      115         395     2,921     2,073     7,367      10,798   
  General and                                                                             
   administrative                                                                         
   (exclusive of noncash                                                                  
   compensation                                                                           
   expense).............      206       1,509     4,653     2,043     7,650      14,018   
  Amortization of                                                                         
   deferred stock                                                                         
   compensation*........      --          --      1,112       363     3,675       4,787   
                           ------    --------  --------  --------  --------    --------   
    Total operating                                                                       
     expenses...........      613      12,580    43,202    22,520    42,651      99,046   
Interest expense                                                                          
 including accretion of                                                                   
 redemption premium.....      --           34       163       124     5,889       6,086   
Interest income.........       (9)       (409)   (2,508)   (1,750)   (2,795)     (5,721)  
                           ------    --------  --------  --------  --------    --------   
Net loss................   $ (604)   $(12,205) $(40,857) $(20,894) $(45,745)   $(99,411)  
                           ======    ========  ========  ========  ========    ========   
Basic and diluted net                                                                     
 loss per share.........   $(1.65)   $  (5.46) $ (10.00) $  (5.79) $  (6.84)   $ (31.25)  
                           ======    ========  ========  ========  ========    ========   
Shares used in                                                                            
 calculating basic and                                                                    
 diluted net loss per                                                                     
 share..................      367       2,236     4,085     3,608     6,685       3,181   
                           ======    ========  ========  ========  ========    ========   
Pro forma basic and                                                                       
 diluted net loss per                                                                     
 share..................                       $  (1.16)           $  (1.07)              
                                               ========            ========               
Shares used in                                                                            
 calculating pro forma                                                                    
 basic and diluted net                                                                    
 loss per share.........                         35,356              42,685               
                                               ========            ========               
*Amortization of                                                                          
 deferred stock                                                                           
 compensation:                                                                            
  Research and                                                                            
   development..........   $  --     $    --   $    454  $    110  $  2,683    $  3,137   
  Sales and marketing...      --          --        269        79       273         542   
  General and                                                                             
   administrative.......      --          --        389       174       719       1,108   
                           ------    --------  --------  --------  --------    --------   
                           $  --     $    --   $  1,112  $    363  $  3,675    $  4,787   
                           ======    ========  ========  ========  ========    ========   

See notes to financial statements.

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MAYAN NETWORKS CORPORATION  
(A Development Stage Company) 

STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY) AND COMPREHENSIVE LOSS  
Period from July 30, 1997 (Inception) Through March 31, 2001  
(In thousands, except share amounts)  

                                                        [Enlarge/Download Table]

                      Convertible                              Notes                   Accumulated                  Total    
                    Preferred Stock      Common Stock        Receivable    Deferred       Other                 Shareholders'
                  ------------------- --------------------      from        Stock     Comprehensive Accumulated    Equity    
                    Shares    Amount    Shares     Amount   Shareholders Compensation  Gain (Loss)    Deficit   (Deficiency) 
                  ---------- -------- ----------  --------  ------------ ------------ ------------- ----------- -------------
                                                                                                                             
Comprehensive                                                                                                                
loss--net loss..         --  $    --         --   $    --     $    --      $    --        $ --       $    (604)   $   (604)  
Issuance of                                                                                                                  
common stock to                                                                                                              
founders in                                                                                                                  
October 1997 at                                                                                                              
$0.004 per                                                                                                                   
share...........         --       --   5,012,500        20         --           --          --             --           20   
Repurchase of                                                                                                                
common stock....         --       --    (500,000)       (2)        --           --          --             --           (2)  
Issuance of                                                                                                                  
preferred Series                                                                                                             
A stock in                                                                                                                   
February and                                                                                                                 
June 1998 at                                                                                                                 
$0.80 per share                                                                                                              
(net of issuance                                                                                                             
costs of $17)...   1,907,500    1,509        --        --          --           --          --             --        1,509   
                  ---------- -------- ----------  --------    --------     --------       -----      ---------    --------   
Balances, June                                                                                                               
30, 1998........   1,907,500    1,509  4,512,500        18         --           --          --            (604)        923   
Net loss........         --       --         --        --          --           --          --         (12,205)    (12,205)  
Other                                                                                                                        
comprehensive                                                                                                                
loss, net                                                                                                                    
unrealized loss                                                                                                              
from short-term                                                                                                              
investments.....         --       --         --        --          --           --          (20)           --          (20)  
Comprehensive                                                                                                                
loss............                                                                                                             
Issuance of                                                                                                                  
common stock in                                                                                                              
August 1998 at                                                                                                               
$0.08 per                                                                                                                    
share...........         --       --     500,000        40         --           --          --             --           40   
Exercise of                                                                                                                  
stock options...         --       --     217,500        18         --           --          --             --           18   
Repurchase of                                                                                                                
common stock....         --       --  (1,585,937)       (6)        --           --          --             --           (6)  
Issuance of                                                                                                                  
preferred Series                                                                                                             
B stock in                                                                                                                   
August 1998 at                                                                                                               
$1.02 per share                                                                                                              
(net of issuance                                                                                                             
costs of $446)..   7,843,137    7,554        --        --          --           --          --             --        7,554   
Issuance of                                                                                                                  
preferred Series                                                                                                             
C stock in April                                                                                                             
1999 at $1.67                                                                                                                
per share (net                                                                                                               
of issuance                                                                                                                  
costs of $55)...  11,826,346   19,694        --        --          --           --          --             --       19,694   
Warrants issued                                                                                                              
in connection                                                                                                                
with long-term                                                                                                               
obligation......         --       --         --         51         --           --          --             --           51   
                  ---------- -------- ----------  --------    --------     --------       -----      ---------    --------   
Balances, June                                                                                                               
30, 1999........  21,576,983   28,757  3,644,063       121         --           --          (20)       (12,809)     16,049   
Net loss........         --       --         --        --          --           --          --         (40,857)    (40,857)  
Other                                                                                                                        
comprehensive                                                                                                                
loss, net                                                                                                                    
unrealized loss                                                                                                              
from                                                                                                                         
investments.....         --       --         --        --          --           --          (18)           --          (18)  
Comprehensive                                                                                                                
loss............                                                                                                             
Exercise of                                                                                                                  
stock options...         --       --   6,589,925     1,244        (730)         --          --             --          514   
Repurchase of                                                                                                                
common stock....         --       --    (495,051)      (47)        --           --          --             --          (47)  
Deferred stock                                                                                                               
compensation....         --       --                 4,939         --        (4,939)        --             --          --    
Amortization of                                                                                                              
deferred stock                                                                                                               
compensation....         --       --         --        --          --         1,112         --             --        1,112   
Issuance of                                                                                                                  
preferred Series                                                                                                             
D stock in                                                                                                                   
October 1999 at                                                                                                              
$4.16 per share                                                                                                              
(net of issuance                                                                                                             
costs of $31)...  14,423,077   59,969        --        --          --           --          --             --       59,969   
                  ---------- -------- ----------  --------    --------     --------       -----      ---------    --------   
Balances, June                                                                                                               
30, 2000........  36,000,060   88,726  9,738,937     6,257        (730)      (3,827)        (38)       (53,666)     36,722   
Net loss*.......         --       --         --        --          --           --          --         (45,745)    (45,745)  
Other                                                                                                                        
comprehensive                                                                                                                
income, net                                                                                                                  
unrealized                                                                                                                   
income from                                                                                                                  
investments*....         --       --         --        --          --           --           85            --           85   
Comprehensive                                                                                                                
loss*...........                                                                                                             
Exercise of                                                                                                                  
stock options*..         --       --   2,009,063     1,247        (323)         --          --             --          924   
Repurchase of                                                                                                                
common stock*...         --       --  (1,141,590)     (439)        --           --          --             --         (439)  
Deferred stock                                                                                                               
compensation*...         --       --                11,287         --       (11,287)        --             --          --    
Reversal of                                                                                                                  
deferred stock                                                                                                               
compensation due                                                                                                             
to employee                                                                                                                  
terminations*...         --       --         --     (2,740)        --         2,740         --             --          --    
Amortization of                                                                                                              
deferred stock                                                                                                               
compensation*...         --       --         --        --          --         3,675         --             --        3,675   
                  ---------- -------- ----------  --------    --------     --------       -----      ---------    --------   
Balances, March                                                                                                              
31, 2001*.......  36,000,060 $ 88,726 10,606,410  $ 15,612    $ (1,053)    $ (8,699)      $  47      $ (99,411)   $ (4,778)  
                  ========== ======== ==========  ========    ========     ========       =====      =========    ========   

                      Total                                                                                                  
                  Comprehensive                                                                                              
                      Loss                                                                                                   
                  -------------                                                                                              
                                                                                                                             
Comprehensive                                                                                                                
loss--net loss..    $   (604)                                                                                                
                  =============                                                                                              
Issuance of                                                                                                                  
common stock to                                                                                                              
founders in                                                                                                                  
October 1997 at                                                                                                              
$0.004 per                                                                                                                   
share...........                                                                                                             
Repurchase of                                                                                                                
common stock....                                                                                                             
Issuance of                                                                                                                  
preferred Series                                                                                                             
A stock in                                                                                                                   
February and                                                                                                                 
June 1998 at                                                                                                                 
$0.80 per share                                                                                                              
(net of issuance                                                                                                             
costs of $17)...                                                                                                             
Balances, June                                                                                                               
30, 1998........                                                                                                             
Net loss........    $(12,205)                                                                                                
Other                                                                                                                        
comprehensive                                                                                                                
loss, net                                                                                                                    
unrealized loss                                                                                                              
from short-term                                                                                                              
investments.....         (20)                                                                                                
                  -------------                                                                                              
Comprehensive                                                                                                                
loss............    $(12,225)                                                                                                
                  =============                                                                                              
Issuance of                                                                                                                  
common stock in                                                                                                              
August 1998 at                                                                                                               
$0.08 per                                                                                                                    
share...........                                                                                                             
Exercise of                                                                                                                  
stock options...                                                                                                             
Repurchase of                                                                                                                
common stock....                                                                                                             
Issuance of                                                                                                                  
preferred Series                                                                                                             
B stock in                                                                                                                   
August 1998 at                                                                                                               
$1.02 per share                                                                                                              
(net of issuance                                                                                                             
costs of $446)..                                                                                                             
Issuance of                                                                                                                  
preferred Series                                                                                                             
C stock in April                                                                                                             
1999 at $1.67                                                                                                                
per share (net                                                                                                               
of issuance                                                                                                                  
costs of $55)...                                                                                                             
Warrants issued                                                                                                              
in connection                                                                                                                
with long-term                                                                                                               
obligation......                                                                                                             
Balances, June                                                                                                               
30, 1999........                                                                                                             
Net loss........    $(40,857)                                                                                                
Other                                                                                                                        
comprehensive                                                                                                                
loss, net                                                                                                                    
unrealized loss                                                                                                              
from                                                                                                                         
investments.....         (18)                                                                                                
                  -------------                                                                                              
Comprehensive                                                                                                                
loss............    $(40,875)                                                                                                
                  =============                                                                                              
Exercise of                                                                                                                  
stock options...                                                                                                             
Repurchase of                                                                                                                
common stock....                                                                                                             
Deferred stock                                                                                                               
compensation....                                                                                                             
Amortization of                                                                                                              
deferred stock                                                                                                               
compensation....                                                                                                             
Issuance of                                                                                                                  
preferred Series                                                                                                             
D stock in                                                                                                                   
October 1999 at                                                                                                              
$4.16 per share                                                                                                              
(net of issuance                                                                                                             
costs of $31)...                                                                                                             
Balances, June                                                                                                               
30, 2000........                                                                                                             
Net loss*.......    $(45,745)                                                                                                
Other                                                                                                                        
comprehensive                                                                                                                
income, net                                                                                                                  
unrealized                                                                                                                   
income from                                                                                                                  
investments*....          85                                                                                                 
                  -------------                                                                                              
Comprehensive                                                                                                                
loss*...........    $(45,660)                                                                                                
                  =============                                                                                              
Exercise of                                                                                                                  
stock options*..                                                                                                             
Repurchase of                                                                                                                
common stock*...                                                                                                             
Deferred stock                                                                                                               
compensation*...                                                                                                             
Reversal of                                                                                                                  
deferred stock                                                                                                               
compensation due                                                                                                             
to employee                                                                                                                  
terminations*...                                                                                                             
Amortization of                                                                                                              
deferred stock                                                                                                               
compensation*...                                                                                                             
Balances, March                                                                                                              
31, 2001*.......                                                                                                             

-----                                                                           
* unaudited                                                                     
See notes to financial statements.  

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

STATEMENTS OF CASH FLOWS
(In thousands)

                                                        [Enlarge/Download Table]

                                                                                      Period from 
                                                                                     July 30, 1997
                             Period from        Years Ended      Nine Months Ended    (Inception) 
                            July 30, 1997        June 30,            March 31,          through   
                         (Inception) through ------------------  ------------------    March 31,  
                            June 30, 1998      1999      2000      2000      2001        2001     
                         ------------------- --------  --------  --------  --------  -------------
                                                                                     (Cumulative) 
                                                                    (unaudited)       (unaudited) 
                                                                                                  
Cash flows from                                                                                   
 operating activities:                                                                            
Net loss...............        $ (604)       $(12,205) $(40,857) $(20,894) $(45,745)   $(99,411)  
Adjustments to                                                                                    
 reconcile net loss to                                                                            
 net cash used in                                                                                 
 operating activities:                                                                            
 Noncash interest                                                                                 
  expense..............           --                7        14         9     4,003       4,024   
 Noncash interest                                                                                 
  income...............           --              --     (1,150)     (893)   (1,541)     (2,691)  
 Depreciation and                                                                                 
  amortization.........             1             103       774       438     1,820       2,698   
 Amortization of                                                                                  
  deferred stock                                                                                  
  compensation.........           --              --      1,112       363     3,675       4,787   
 Gain on disposal of                                                                              
  property and                                                                                    
  equipment............           --              (10)      --        --        --          (10)  
 Deferred rent.........           --              --        250        62        73         323   
 Change in assets and                                                                             
  liabilities:                                                                                    
 Prepaid expenses and                                                                             
  other current                                                                                   
  assets...............            (3)            (66)     (609)     (455)     (335)     (1,013)  
 Accounts payable......            98             685     5,606        20    (2,554)      3,835   
 Accrued liabilities...            50             425       218       523     2,353       3,046   
                               ------        --------  --------  --------  --------    --------   
   Net cash used in                                                                               
    operating                                                                                     
    activities.........          (458)        (11,061)  (34,642)  (20,827)  (38,251)    (84,412)  
                               ------        --------  --------  --------  --------    --------   
Cash flows from                                                                                   
 investing activities:                                                                            
Purchases of property                                                                             
 and equipment.........           (34)           (805)   (4,417)   (2,217)   (3,055)     (8,311)  
Proceeds from sale of                                                                             
 equipment.............           --                4       --        --        --            4   
Purchases of short-term                                                                           
 investments...........           --           (8,438)  (46,564)  (44,607)  (69,756)   (124,758)  
Proceeds from maturity                                                                            
 of short-term                                                                                    
 investment............           --              987    38,362    33,231    73,045     112,394   
Restricted cash........           --              --       (799)     (799)      (25)       (824)  
Other assets...........           --              (94)     (336)     (373)   (1,798)     (2,228)  
                               ------        --------  --------  --------  --------    --------   
   Net cash used in                                                                               
    investing                                                                                     
    activities.........           (34)         (8,346)  (13,754)  (14,765)   (1,589)    (23,723)  
                               ------        --------  --------  --------  --------    --------   
Cash flows from                                                                                   
 financing activities:                                                                            
Borrowings under debt                                                                             
 obligations...........           --            1,264       232       100    75,000      76,496   
Repayments of debt                                                                                
 obligations...........           --             (142)     (394)     (158)     (332)       (868)  
Subordinated debt                                                                                 
 isuance costs.........           --              --        --        --     (5,058)     (5,058)  
Net proceeds from sale                                                                            
 of Series A preferred                                                                            
 stock.................         1,509             --        --        --        --        1,509   
Net proceeds from sale                                                                            
 of Series B preferred                                                                            
 stock.................           --            7,554       --        --        --        7,554   
Net proceeds from sale                                                                            
 of Series C preferred                                                                            
 stock.................           --           19,694       --        --        --       19,694   
Net proceeds from sale                                                                            
 of Series D preferred                                                                            
 stock.................           --              --     59,969    59,969       --       59,969   
Net proceeds from sale                                                                            
 of common stock.......            20              58       514       416       924       1,516   
Repurchase of common                                                                              
 stock.................            (2)             (6)      (47)      (15)     (439)       (494)  
                               ------        --------  --------  --------  --------    --------   
   Net cash provided by                                                                           
    financing                                                                                     
    activities.........         1,527          28,422    60,274    60,312    70,095     160,318   
                               ------        --------  --------  --------  --------    --------   
Net increase in cash                                                                              
 and cash equivalents..         1,035           9,015    11,878    24,720    30,255      52,183   
Cash and cash                                                                                     
 equivalents, beginning                                                                           
 of period.............           --            1,035    10,050    10,050    21,928         --    
                               ------        --------  --------  --------  --------    --------   
Cash and cash                                                                                     
 equivalents, end of                                                                              
 period................        $1,035        $ 10,050  $ 21,928  $ 34,770  $ 52,183    $ 52,183   
                               ======        ========  ========  ========  ========    ========   
Supplemental disclosure                                                                           
 of cash financial                                                                                
 activities--interest                                                                             
 paid..................        $  --         $     27  $    163  $    120  $     84    $    274   
                               ======        ========  ========  ========  ========    ========   
Supplemental noncash                                                                              
 financial activities:                                                                            
 Equipment acquired                                                                               
  under capital lease..        $  --         $     16  $    --   $    --   $    --     $     16   
                               ======        ========  ========  ========  ========    ========   
 Equipment sold under                                                                             
  notes receivable.....        $  --         $     36  $    --   $    --   $    --     $     36   
                               ======        ========  ========  ========  ========    ========   
 Deferred stock                                                                                   
  compensation.........        $  --         $    --   $  4,939  $  2,035  $ 11,287    $ 16,226   
                               ======        ========  ========  ========  ========    ========   
 Reversal of deferred                                                                             
  stock compensation...        $  --         $    --   $    --   $    --   $  2,740    $  2,740   
                               ======        ========  ========  ========  ========    ========   
 Common stock warrant                                                                             
  issuance.............        $  --         $     51  $    --   $    --   $    --     $     51   
                               ======        ========  ========  ========  ========    ========   
 Issuance of common                                                                               
  stock for shareholder                                                                           
  notes receivable.....        $  --         $    --   $    730  $    730  $    323    $  1,053   
                               ======        ========  ========  ========  ========    ========   

See notes to financial statements.

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from July 30, 1997 (Inception) through March 31, 2001 is
unaudited)
(Dollars in thousands, except per share amounts)

1. Summary of Significant Accounting Policies                                   

Organization and Basis of Presentation--MAYAN Networks Corporation (the   
Company), a development stage company, was incorporated in July 1997 in         
California. Through June 30, 2000, the Company has developed and marketed       
telecommunications solutions designed to address the bandwidth constraints,     
complexity and service limitations of the metro edge.                           

The Company is in the development stage and its financial statements are  
presented in accordance with Statement of Financial Accounting Standards (SFAS) 
No. 7, Accounting and Reporting by Development Stage Enterprises. The Company   
is subject to the risks associated with a development stage enterprise,         
including the need to successfully develop, demonstrate and refine its product, 
develop its marketing and distribution channels, recruit and retain key         
employees, and continue to raise financing sufficient to accomplish its         
business objectives.                                                            

 The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of     
liabilities in the normal course of business. The Company is in the development 
stage and has incurred a net loss of $99,411 since its inception. This factor,  
among others, raises substantial doubt about the Company's ability to continue  
as a going concern. The financial statements do not include any adjustments     
relating to the recoverability and classification of asset amounts or the       
amounts and classification of recorded liabilities that might be necessary      
should the Company be unable to continue as a going concern. The Company will   
need to obtain additional financing to sustain it through its development stage 
and until it generates adequate revenues through its operations. Management is  
currently in the process of seeking sources of such financing (see Note 12 for  
additional borrowing obtained by the Company).                                  

Cash Equivalents--The Company considers all highly liquid debt and equity 
instruments purchased with a remaining maturity of three months or less to be   
cash equivalents.                                                               

  Investments--Investments are comprised primarily of certificates of deposit,
commercial paper and corporate debt securities. Investments are classified as   
available-for-sale securities and are stated at market value with unrealized    
losses included in shareholders' equity. Investments purchased with remaining   
maturities of greater than three months are classified as short-term            
investments based on the Company's intent to sell such securities to fund       
operations.                                                                     

Restricted Cash--Restricted cash consists of certificates of deposit which
are restricted from use pursuant to certain lease and credit card merchant bank 
service agreements.                                                             

Concentration of Credit Risk--Financial instruments which potentially     
subject the Company to concentrations of credit risk consist primarily of cash  
equivalents and investments. The Company's cash equivalents consist of checking 
and savings accounts, money market accounts, corporate debt securities and      
commercial paper with remaining maturities less than 90 days and certificates   
of deposit. The Company maintains the management of the majority of its cash    
and cash equivalents and short-term investments with four financial             
institutions. Investment of the funds by these institutions is governed by the  
Company's corporate investment policy, which aims to reduce credit risk by      
restricting investment to readily convertible high-grade U.S. dollar            
denominated investments and spreading it amongst a number of institutions.      

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

Property and Equipment--Property and equipment are stated at cost and     
depreciated over estimated useful lives of three years using the straight-line  
method. Leasehold improvements are amortized over the shorter of the lease term 
or its useful life.                                                             

Long-Lived Assets--The Company evaluates long-lived assets for impairment 
whenever events or changes in circumstances indicate that the carrying amount   
of an asset may not be recoverable. Recoverability of assets to be held and     
used is measured by comparison of the carrying amount of an asset to future     
undiscounted 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 exceeds the   
fair value of the assets.                                                       

Subordinated Debt Issuance Costs--The Company is amortizing subordinated  
debt issuance costs over the period from the date of issuance of the            
subordinated debt through November 1, 2003, which is the first date that the    
note holders may redeem their notes in the event that the Company does not      
complete a Complying Public Equity Offering, as defined in the note agreement   
(see Note 12).                                                                  

Income Taxes--The Company accounts for income taxes under an asset and    
liability approach. Deferred income taxes reflect the impact of temporary       
differences between assets and liabilities recognized for financial reporting   
purposes and such amounts recognized for income tax reporting purposes, net     
operating loss carryforwards and other tax credits measured by applying         
currently enacted tax laws. Valuation allowances are provided when necessary to 
reduce deferred tax assets to an amount that is more likely than not to be      
realized.                                                                       

Certain Significant Risks and Uncertainties--The Company operates in a    
dynamic industry and, accordingly, can be affected by a variety of factors. For 
example, management believes that changes in any of the following areas could   
have a negative effect on the Company in terms of its future financial          
position, results of operations or cash flows: ability to obtain additional     
financing; regulatory changes; fundamental changes in the technology underlying 
telecommunications products or incorporated in customers' products; market      
acceptance of the Company's products under development; development of sales    
channels; litigation or other claims against the Company; the hiring, training  
and retention of key employees; successful and timely completion of product     
development efforts; new product introductions by competitors and reliance on   
one manufacturer for production of its products.                                

  Significant Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make       
estimates and assumptions that affect the reported amounts of assets,           
liabilities and disclosures of contingent assets and liabilities at the date of 
the financial statements and the reported amounts of expenses during the        
reporting period. Actual results could differ from those estimates.             

 Stock-Based Compensation--The Company uses the intrinsic value-based method
in accordance with Accounting Principles Board (APB) Opinion No. 25, Accounting 
for Stock Issued to Employees, to account for employee stock-based              
compensation. Accordingly, compensation cost is recorded on the date of grant   
to the extent the fair value of the underlying share of common stock exceeds    
the exercise price for a stock option or the purchase price for a share of      
common stock. The compensation is being amortized on an accelerated basis over  
the vesting period of the individual award consistent with the method described 
in the Financial Accounting Standards Board (FASB) Interpretation No. 28.       
Pursuant to SFAS No. 123, Accounting for Stock-Based Compensation, the Company  
discloses the pro forma effect of using the fair value method of accounting for 
employee stock-based compensation arrangements.                                 

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

Stock-based awards granted to non-employees are accounted for pursuant to 
the fair value method in SFAS No. 123 and Emerging Issues Task Force (EITF) No. 
96-18. The associated expense is recognized by the Company over the period the  
services are performed by the non-employee.                                     

  Net Loss per Common Share--Basic net loss per common share excludes dilution
and is computed by dividing net loss by the weighted average number of common   
shares outstanding for the period (excluding shares subject to repurchase).     
Diluted net loss per common share was the same as basic net loss per common     
share for all periods presented since the effect of any potentially dilutive    
securities is excluded as they are antidilutive because of the Company's net    
loss.                                                                           

Unaudited Pro Forma Net Loss per Common Share--Pro forma basic and diluted
net loss per common share is computed by dividing net loss by the weighted      
average number of common shares outstanding for the period (excluding shares    
subject to repurchase) plus the weighted average number of common shares        
resulting from the assumed conversion upon the closing of the proposed merger   
(See Note 12) of outstanding shares of convertible preferred stock.             

Unaudited Pro Forma Information--The unaudited pro forma balance sheet    
information assumes that as of March 31, 2001, each share of preferred stock    
had converted into one share of common stock upon closing of the proposed       
merger (See Note 12).                                                           

Unaudited Interim Financial Information--The unaudited interim financial  
information as of March 31, 2001 and for the nine months ended March 31, 2000   
and 2001 has been prepared on the same basis as the audited financial           
statements. In the opinion of management, such unaudited information includes   
all adjustments (consisting only of normal recurring adjustments) necessary for 
a fair presentation of this interim information when read in conjunction with   
the financial statements and notes thereto. Operating results for the nine      
months ended March 31, 2001 are not indicative of the results that may be       
expected for the year ended June 30, 2001.                                      

Comprehensive Loss--SFAS No. 130, Reporting Comprehensive Income, requires
that an enterprise report, by major components and as a single total, the       
change in its net assets during the period from non-owner sources. Statements   
of comprehensive loss for the period from July 30, 1997 (inception) through     
June 30, 1998, and the years ended June 30, 1999 and 2000 and the nine months   
ended March 31, 2001 have been included within the statements of shareholders'  
equity and comprehensive loss.                                                  

  Recently Issued Accounting Standards--In June 1998, the FASB issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. This         
statement requires companies to record derivatives on the balance sheet as      
assets or liabilities, measured 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, as amended, will be effective for the Company's beginning July 1,      
2000. As the Company does not currently hold any derivative instruments or      
engage in hedging activities, the Company has determined that the adoption of   
this statement did not have a material impact on the Company's financial        
position, results of operations or cash flows.                                  

 In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition, which outlines the      
basic criteria that must be met to recognize revenue and provides guidance for  
presentation of revenue and for disclosure related to revenue recognition       
policies in financial statements filed with the SEC. The adoption of SAB No.    
101 did not have a material impact on the Company's financial statements and    
results of operations as the Company has not had any revenue to date.           

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

  In March 2000, the FASB issued Interpretation No 44 (FIN No. 44), Accounting
for Certain Transactions Involving Stock Compensation--An Interpretation of APB 
25. FIN No. 44 clarifies (i) the definition of employee for purposes of         
applying APB Opinion No. 25, (ii) the criteria for determining whether a plan   
qualifies as a non-compensatory plan, (iii) the accounting consequences of      
various modifications to the terms of a previously fixed stock option or award, 
and (iv) the accounting for an exchange of stock compensation awards in a       
business combination. FIN No. 44 was effective July 1, 2000. The adoption of    
FIN No. 44 did not have a material effect on the Company's financial position,  
results of operations or cash flows.                                            

Reclassification--Certain prior period amount have been reclassified to   
conform with the current period presentation.                                   

2. Investments                                                                  

Short-term investments include the following available-for-sale securities
at June 30, 1999:                                                               

                                                                [Download Table]

                                                                   Unrealized
                                                  Amortized Market  Holding  
                                                    Cost    Value    Losses  
                                                  --------- ------ ----------
                                                                             
Commercial paper.................................  $ 2,281  $2,278   $  (3)  
Corporate debt securities........................    3,141   3,135      (6)  
Certificates of deposit..........................    2,029   2,018     (11)  
                                                   -------  ------   -----   
Total............................................  $ 7,451  $7,431   $ (20)  
                                                   =======  ======   =====   

Short-term investments include the following available-for-sale securities
at June 30, 2000:                                                               

                                                                [Download Table]

                                                                   Unrealized
                                                 Amortized Market   Holding  
                                                   Cost     Value    Losses  
                                                 --------- ------- ----------
                                                                             
Commercial paper................................ $  2,070  $ 2,070   $ --    
Corporate debt securities.......................   10,721   10,697     (24)  
Certificates of deposit.........................    4,012    3,998     (14)  
                                                 --------  -------   -----   
Total........................................... $ 16,803  $16,765   $ (38)  
                                                 ========  =======   =====   

Short-term investments include the following available-for-sale securities
at March 31, 2001:                                                              

                                                                [Download Table]

                                                                   Unrealized
                                                 Amortized Market   Holding  
                                                   Cost     Value     Gain   
                                                 --------- ------- ----------
                                                                             
United States Government securities.............  $15,055  $15,102    $ 47   
                                                  =======  =======    ====   

Maturities of short-term investments available-for-sale are as follows:   

                                                                [Download Table]

                                                             June            
                                                              30,   March 31,
                                                             2000     2001   
                                                            ------- ---------
                                                                             
Within one year............................................ $14,425  $15,102 
One to two years...........................................   2,340      --  
                                                            -------  ------- 
                                                            $16,765  $15,102 
                                                            =======  ======= 

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MAYAN NETWORKS CORPORATION  
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from  
July 30, 1997 (Inception) through March 31, 2001 is unaudited)  
(Dollars in thousands, except per share amounts)  

3. Property and Equipment                                                       

Property and equipment consist of:                                        

                                                                [Download Table]

                                                       June 30,              
                                                     -------------  March 31,
                                                     1999    2000     2001   
                                                     -----  ------  ---------
                                                                             
Computers, purchased software and equipment......... $ 578  $4,230   $6,711  
Furniture and fixtures..............................   172     661      634  
Leasehold improvements..............................    67     343      943  
                                                     -----  ------   ------  
Total...............................................   817   5,234    8,288  
Accumulated depreciation and amortization...........   (96)   (870)  (2,689) 
                                                     -----  ------   ------  
Property and equipment, net......................... $ 721  $4,364   $5,599  
                                                     =====  ======   ======  

4. Debt Obligations                                                             

In January 1999, the Company entered into a term loan agreement for       
equipment purchases. Borrowings bear interest ranging from 12.6% to 14.9% per   
annum and are payable in monthly installments with the remaining unpaid         
principal and interest due upon maturity in January 2002, May 2002 and          
September 2002. Borrowings under the agreement are collateralized by the        
purchased equipment financed by the loan. As of June 30, 2000, $967 was         
outstanding under the arrangement.                                              

In consideration for this financing arrangement, the Company issued       
warrants to purchase 88,236 shares of common stock at $1.02 per share (see      
Note 7). The estimated fair value of such warrants of $51 was recorded as       
another asset and is being amortized as interest expense over the terms of the  
loan. In connection with these warrants, additional interest expense of $7,     
$14 and $21 was recorded in the accompanying statement of operations for        
fiscal 1999, 2000 and the period from July 30, 1997 (inception) through June    
30, 2000, respectively. The remaining unamortized amount of $44 is included in  
other assets in the accompanying balance sheet at June 30, 2000.                

Future minimum payments under debt obligations as of June 30, 2000 (see   
Note 12 for additional borrowings) are $448 in fiscal 2001, $482 in fiscal      
2002 and $37 in fiscal 2003.                                                    

5. Capital Leases                                                               

At June 30, 1999 and 2000, equipment under capital leases amounted to $13 
and $7 (net of accumulated amortization of $3 and $9, respectively).            

The following is a schedule of future minimum lease payments under capital
leases as of June 30, 2000:                                                     

                                                                [Download Table]

Year Ending June 30,                                                       
--------------------                                                       
                                                                           
2001.................................................................. $ 5 
2002..................................................................   5 
                                                                       --- 
Total minimum lease payments..........................................  10 
Less amount representing interest.....................................  (1)
                                                                       --- 
                                                                         9 
Less current portion..................................................  (5)
                                                                       --- 
Long-term portion..................................................... $ 4 
                                                                       === 

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

6. Commitments and Contingencies                                                

Lease Commitments                                                             

The Company leases its principal facilities under noncancelable operating 
leases which expire at various dates through 2005 (with an option to extend the 
term for five years for the Company's location in San Jose, California). The    
Company subleases a portion of its facilities to third parties under operating  
leases expiring through September 2001. The lease provides for escalating       
rental payments over the lease period. Rent expense is recognized on a          
straight-line basis over the term of the lease. Deferred rent represents the    
difference between rental payments and rent expense recognized. At June 30,     
2000, the future minimum rental payments and future minimum annual rental       
income under operating leases are as follows:                                   

                                                                [Download Table]

                                                              Lease  Rental
Year Ending June 30,                                         Payment Income
--------------------                                         ------- ------
                                                                           
2001........................................................ $ 2,221 $ 614 
2002........................................................   2,262   122 
2003........................................................   2,282   --  
2004........................................................   2,203   --  
2005........................................................   1,053   --  
                                                             ------- ----- 
 ........................................................... $10,021 $ 736 
                                                             ======= ===== 

Rent expense, net of subrental income of $116 in fiscal 2000, was         
approximately $11, $211, $1,288 and $1,510 for fiscal 1998, 1999, 2000 and the  
period from July 30, 1997 (inception) through June 30, 2000, respectively.      

Contingencies                                                                 

A complaint has been filed against the Company alleging unfair hiring     
practices. The Company is in the process of reviewing the complaint; however,   
the ultimate outcome of this matter cannot be determined at this time.          

7. Shareholders' Equity                                                         

Convertible Preferred Stock                                                   

The significant terms of the convertible preferred stock are as follows:  

.  Each share is convertible, at the option of the holder, into one share 
of common stock (subject to adjustments for events of dilution) and 
has the same voting rights as the number of common shares into which
it is convertible. Each share will automatically convert into shares
  of common stock at the conversion price in effect for such shares upon
 the earlier of (i) a public offering of common stock meeting specific
criteria or (ii) the date specified by written consent of at least a
majority of each class of outstanding convertible preferred stock,  
voting as separate classes.                                         

.  Each share (subject to adjustments for events of dilution) is entitled 
 to per annum dividends when and if declared by the Board of Directors
of the Company at $0.08 per share for Series A convertible preferred
stock, $0.082 per share for Series B convertible preferred stock,   
  $0.13 per share for Series C convertible preferred stock and $0.33 per
share for Series D convertible preferred stock.                     

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

.  In the event of liquidation, dissolution, sale of substantially all of 
the Company's assets or a change in control of the Company, the     
holders of Series A, Series B, Series C and Series D convertible    
preferred stock shall receive an amount equal to $0.80, $1.02, $1.67
and $4.16 per share, respectively, plus any declared but unpaid     
dividends. Upon completion of distribution of the above amounts,    
  Series B, Series C and Series D convertible preferred stock and common
stock holders shall receive on a pro rata basis, based on the number
of common shares on an as if converted basis, any remaining proceeds
until Series B convertible preferred shareholders have received     
 aggregate proceeds of $2.04 per share, Series C convertible preferred
shareholders have received aggregate proceeds of $3.34 per share and
Series D convertible preferred shareholders have received aggregate 
  proceeds of $8.32 per share. Any remaining assets shall be distributed
to the common shareholders based on the number of shares held.      

  During fiscal 1999, the Company entered into a consulting agreement with two
founders totaling $400 to facilitate preferred Series B stock financing.        
Accordingly, this amount has been recorded as a preferred Series B stock        
issuance cost in the statement of shareholders' equity and comprehensive loss.  

Warrants                                                                      

  In fiscal 1999, the Company issued warrants, in connection with certain debt
obligations (see Note 4), to purchase 88,236 shares of common stock at $1.02    
per share. The warrants are immediately exercisable and expire in January 2006. 
No warrants have been exercised as of June 30, 2000.                            

Common Stock                                                                  

Common stock issued to certain Company founders, employees and consultants
is subject to repurchase agreements whereby the Company has the option to       
repurchase the unvested shares upon termination of employment at the original   
issue price. The number of shares subject to repurchase is reduced at a rate of 
25% upon issuance and 1/36 per month thereafter. The Company's repurchase right 
generally lapses sixty days from such date. In the event of an acquisition or   
merger into another company (unless the Company's shareholders own more than    
50% of the surviving entity), the sale of all or substantially all of the       
Company's assets or an initial public offering, no shares will be further       
subject to repurchase. At June 30, 2000, 56,250 shares were subject to          
repurchase by the Company. The Company repurchased 1,585,937 shares from three  
founders in fiscal 1999 and 500,000 shares from four founders in fiscal 1998.   

At June 30, 2000, the Company has reserved shares of common stock for     
issuance as follows:                                                            

                                                                [Download Table]
                                                                           
Conversion of convertible preferred stock....................... 36,000,060
Issuance under the option plan..................................  4,673,563
Common stock issuable under warrant.............................     88,236
                                                                 ----------
                                                                 40,761,859
                                                                 ==========

Stock Option Plan                                                             

The Company's 1998 Stock Option Plan (the Plan) authorizes the grant of   
options to purchase up to 10,985,937 (increased from 6,585,937 in fiscal 2000)  
shares of common stock. At June 30, 2000, 1,767,271                             

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

shares were available for future grant under the Plan. Stock options may be     
granted to employees, officers, directors, and consultants at prices not less   
than the fair market value at the date of grant for incentive stock options and 
not less than 85% of fair market value for nonstatutory stock options as        
determined by the Board of Directors. These options generally expire ten years  
from the date of grant and are immediately exercisable. Options generally vest  
at a rate of 25% on the first anniversary of the grant date and 1/36 per month  
thereafter.                                                                     

Option activity under the Plan is as follows:                             

                                                                [Download Table]

                                                                   Weighted
                                                                   Average 
                                                       Number of   Exercise
                                                         Shares     Price  
                                                       ----------  --------
                                                                           
Outstanding, July 1, 1998.............................        --    $   -- 
  Granted (weighted average fair value of $0.02 per                        
   share).............................................  5,576,500     0.09 
  Exercised...........................................   (217,500)    0.08 
  Canceled............................................   (597,500)    0.09 
                                                       ----------          
Outstanding, June 30, 1999 (211,979 shares vested)....  4,761,500     0.09 
  Granted (weighted average fair value of $1.20 per                        
   share).............................................  5,189,800     0.43 
  Exercised........................................... (6,589,925)    0.19 
  Canceled............................................   (455,083)    0.27 
                                                       ----------          
Outstanding, June 30, 2000............................  2,906,292     0.44 
  Granted.............................................  3,353,625     1.05 
  Exercised........................................... (2,009,063)    0.62 
  Canceled............................................ (1,175,408)    1.43 
                                                       ----------          
Outstanding, March 31, 2001...........................  3,075,446   $ 0.63 
                                                       ==========          

 Additional information regarding options outstanding as of June 30, 2000 is
as follows:                                                                     

                                                                [Download Table]

                                  Options Outstanding         Options Vested 
                            -------------------------------- ----------------
                                         Weighted                            
                                          Average                            
                                         Remaining  Weighted         Weighted
                                        Contractual Average          Average 
                              Number       Life     Exercise Number  Exercise
Exercise Prices             Outstanding   (Years)    Price   Vested   Price  
---------------             ----------- ----------- -------- ------- --------
                                                                             
$0.08......................    175,000     8.04      $ 0.08   83,854  $ 0.08 
0.10.......................    389,792     8.60        0.10  133,646    0.10 
0.17.......................    659,000     9.09        0.17   38,230    0.17 
0.50.......................    353,000     9.48        0.50   24,896    0.50 
0.75.......................  1,329,500     9.80        0.75      313    0.75 
                             ---------                       -------         
$0.08--$0.75...............  2,906,292     9.34      $ 0.44  280,939  $ 0.14 
                             =========                       =======         

At June 30, 2000, 4,056,581 unvested shares issued under the Plan were    
subject to the repurchase at the original issuance price by the Company.        

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

Additional Stock Plan Information                                             

  As discussed in Note 1, the Company continues to account for its stock-based
awards using the intrinsic value method in accordance with APB No. 25,          
Accounting for Stock Issued to Employees, and its related interpretations.      
Under the intrinsic-value method of accounting for stock-based compensation     
arrangements for employees, compensation cost is recognized to the extent the   
fair value of the underlying common stock exceeds the exercise price of the     
stock options at the date of grant. Deferred stock compensation, net of         
cancellations due to employee terminations, of $4,479 and $8,492 has been       
recorded during fiscal 2000 and the nine months ended March 31, 2001,           
respectively, for the excess of fair value of the common stock underlying the   
options at the date of grant over the exercise price of the options. These      
amounts are being amortized on an accelerated basis over the vesting period,    
generally four years, consistent with the method described in FASB              
Interpretation No. 28. Amortization of deferred compensation related to         
employee grants, net of reversals due to terminations, was $845 and $3,556      
during fiscal 2000 and the nine months ended March 31, 2001, respectively.      

In March 2001, the Company cancelled options to purchase 110,500 shares of
the Company's common stock previously granted to employees. These options had   
an original exercise price of $5.30. The company replaced the cancelled options 
with new options with an exercise price of $0.75. Under the FASB Interpretation 
No. 44 "Accounting for Certain Transactions Involving Stock Compensation," an   
Interpretation of APB No. 25, these options will be accounted for as variable   
grants. Accordingly, the Company will be required to recognize compensation     
expense equal to the intrinsic value, the difference between the exercise price 
of $0.75 and the fair market value of the Company's common stock until these    
options are exercised, forfeited, or expire unexercised.                        

SFAS No. 123, Accounting for Stock-Based Compensation, requires the       
disclosure of pro forma net income or loss had the Company adopted the fair     
value method. Under SFAS No. 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 expected time to exercise, which greatly affect the      
calculated values. The Company's calculations were made using the minimum value 
method with the following weighted average assumptions: expected life, one year 
after vesting in 1999 and 2000; risk-free interest rate, 5.46% and 6.77% in     
1999 and 2000, respectively; and no dividends during the expected term. The     
Company's calculations are based on a multiple option valuation approach, and   
forfeitures are recognized as they occur. If the computed fair values of the    
fiscal 1999 and fiscal 2000 awards had been amortized to expense over the       
vesting period of the awards under the fair value method as required under SFAS 
No. 123, pro forma net loss would have been approximately $12,226 and $40,948   
for 1999 and 2000, respectively.                                                

                                                                [Download Table]

                                                        Years Ended June   
                                                               30,         
                                                        ------------------ 
                                                          1999      2000   
                                                        --------  -------- 
                                                                           
Net Loss:                                                                  
  As reported.......................................... $(12,205) $(40,857)
  Pro forma............................................ $(12,226) $(40,948)
Basic and diluted net loss per share:                                      
  As reported.......................................... $  (5.46) $ (10.00)
  Pro forma............................................ $  (5.47) $ (10.02)

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

Under the 1998 Stock Plan, the Company issued 23,800 stock options to non-
employees in fiscal 2000 in exchange for consulting services rendered. These    
stock options were fully vested at the date of grant. The aggregate estimated   
fair value of these shares and the resulting expense based on the Black-Scholes 
option pricing model was $17. In addition, the Company granted 110,000, 43,000  
and 20,000 options in fiscal 1999, 2000, and the nine months ended March 31,    
2001, respectively, to non-employees, which vest ratably over 48 months as      
services are performed. Deferred stock compensation was not material in fiscal  
1999, $443 in fiscal 2000 and $55 for the nine months ended March 31, 2001, for 
the fair value of these options. Amortization of deferred stock compensation    
related to these non-employee grants was $0 in fiscal 1999, $250 in fiscal 2000 
and $119 for the nine months ended March 31, 2001. The fair value of the        
options granted to non-employees is estimated using the Black-Scholes option    
pricing model with the following weighted average assumptions: no dividend      
yield; volatility of 70%; risk-free interest rate of 5.46%, 6.77% and 6.34% in  
fiscal 1999 and 2000 and the nine months ended March 31, 2001, respectively;    
and a contractual life of ten years.                                            

Notes Receivable from Stockholders                                            

During fiscal 2000, the Company received $730 in promissory notes for     
certain employees who are officers in exchange for common stock. The loans bear 
interest at 5.98% and are payable five years from the date of issuance, upon    
termination of employment, or upon acquisition of the Company. The notes are    
full recourse and are secured by the underlying common stock (3,823,000         
shares).                                                                        

8. Income Taxes                                                                 

 Due to the Company's cumulative deficit, there was no provision for federal
income taxes fiscal 1998, 1999 and 2000 and the period from July 30, 1997       
(inception) through June 30, 2000.                                              

 Significant components of the Company's net deferred tax assets for federal
and state income taxes at June 30 consist of:                                   

                                                                [Download Table]

                                                            1999    2000  
                                                           ------- -------
                                                                          
Deferred tax assets:                                                      
  Net operating loss carryforwards........................ $ 4,949 $19,556
  Credit carryforwards....................................      58   4,868
  Accruals and reserves recognized in different periods...     162     256

                                                                [Download Table]
                                                                         
  Stock-based compensation..............................    --       100 
                                                         ------  ------- 
Total deferred tax assets...............................  5,169   24,780 
Deferred tax liabilities--excess tax over book                           
 deprecation and other..................................    (20)      (8)
                                                         ------  ------- 
Total net deferred tax assets...........................  5,149   24,772 
Valuation reserve....................................... (5,149) (24,772)
                                                         ------  ------- 
Net deferred tax asset.................................. $  --   $   --  
                                                         ======  ======= 

At June 30, 2000, the Company has federal and state net operating loss    
carryforwards of approximately $48,699 and $49,964, respectively, expiring      
beginning in 2019 and 2006, respectively.                                       

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

At June 30, 2000, the Company also has research and development credits of
approximately $3,068 and $1,800 available to offset future federal and state    
income taxes, respectively. The federal tax credit carryforward expires         
beginning in 2019. The state tax credit carryforward has no expiration.         

Current federal and California tax law includes provisions limiting the   
annual use of net operating loss and credit carryforwards in the event of       
certain defined changes in stock ownership. The Company's capitalization        
described herein may have resulted in such a change. Accordingly, the annual    
use of the Company's net operating loss and credit carryforwards would be       
limited according to these provisions. Management has not yet determined the    
extent of such limitation. Such limitation may result in the loss of            
carryforward benefits due to their expiration.                                  

9. Employee Benefit Plan                                                        

The Company sponsors a 401(k) Profit Sharing Plan and Trust (the Plan) for
all employees who meet certain eligibility requirements. Participants may       
contribute, on a pre-tax basis, between 1% and 20% of their annual              
compensation, but not to exceed a maximum contribution amount pursuant to       
Section 401(k) of the Internal Revenue Code. The Company is not required, nor   
has it contributed, to the Plan for any of the periods presented.               

10. Segment Information                                                         

SFAS No. 131, Disclosures About Segments of an Enterprise and Related     
Information, establishes standards for the manner in which public companies     
report information about operating segments, products and services, geographic  
areas and major customers in annual and interim financial statements.           

The method of determining what information to report is based on the way  
that management organizes the operating segments within an enterprise for       
making operating decisions and assessing financial performance.                 

The Company's chief operating decision maker is considered to be the      
Company's Chief Executive Officer (CEO). From inception of the Company through  
June 30, 2000, the Company has one product line. The CEO reviews financial      
information on an entity level basis for purposes of making operating decisions 
and assessing financial performance. The entity level financial information is  
the same as the information presented in the accompanying statements of         
operations. Accordingly, the Company has determined that it is engaged in a     
single operating segment.                                                       

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

11. Net Loss per Share                                                          

  The following is a reconciliation of the numerators and denominators used in
computing basic and diluted net loss per share:                                 

                                                        [Enlarge/Download Table]

                          Period from                                           Period from  
                         July 30, 1997 Years Ended June    Nine Months Ended   July 30, 1997 
                          (Inception)         30,              March 31,        (Inception)  
                            through    ------------------  ------------------     through    
                         June 30, 1998   1999      2000      2000      2001    March 31, 2001
                         ------------- --------  --------  --------  --------  --------------
                                                                                             
Net loss (numerator),                                                                        
 basic and diluted.....     $  (604)   $(12,205) $(40,857) $(20,894) $(45,745)    $(99,411)  
                            =======    ========  ========  ========  ========     ========   
Shares (denominator):                                                                        
  Weighted average                                                                           
   common shares                                                                             
   outstanding.........       3,456       3,894     7,586     6,788    10,759        6,195   
  Weighted average                                                                           
   common shares                                                                             
   outstanding subject                                                                       
   to repurchase.......      (3,089)     (1,658)   (3,501)   (3,180)   (4,074)      (3,014)  
                            -------    --------  --------  --------  --------     --------   
  Shares used in                                                                             
   computation, basic                                                                        
   and diluted.........         367       2,236     4,085     3,608     6,685        3,181   
                            =======    ========  ========  ========  ========     ========   
Net loss per share,                                                                          
 basic and diluted.....     $ (1.65)   $  (5.46) $ (10.00) $  (5.79) $  (6.84)    $ (31.25)  
                            =======    ========  ========  ========  ========     ========   
Shares used in                                                                               
 computation, basic and                                                                      
 diluted...............                             4,085               6,685                
Weighted average                                                                             
 preferred stock                                                                             
 outstanding...........                            31,271              36,000                
                                                 --------            --------                
Shares used in                                                                               
 computation of pro                                                                          
 forma net loss per                                                                          
 share, basic and                                                                            
 diluted...............                            35,356              42,685                
                                                 ========            ========                
Pro forma net loss per                                                                       
 share, basic and                                                                            
 diluted...............                          $  (1.16)           $  (1.07)               
                                                 ========            ========                

For the above mentioned periods, the Company had securities outstanding   
which could potentially dilute basic earnings per share in the future, but were 
excluded from the computation of diluted net loss per share in the periods      
presented, as their effect would have been antidilutive. Such outstanding       
securities consist of the following:                                            

                                                                [Download Table]

                            Period from                                       
                              July 30,                                        
                                1997                         Nine Months Ended
                            (Inception)  Year Ended June 30,     March 31,    
                              through    ------------------- -----------------
                            June 30 1998   1999      2000      2000     2001  
                            ------------ --------- --------- -------- --------
                                                                              
Convertible preferred                                                         
 stock.....................    1,908        21,577    36,000   36,000   36,000
Shares of common stock                                                        
 subject to repurchase.....    2,500         1,131     4,118    4,845    3,212
Outstanding options and                                                       
 warrants..................      --          4,850     2,995    2,395    3,164
Weighted average exercise                                                     
 price of options..........      --      $    0.09 $    0.44 $   0.36 $   0.63
                               =====     ========= ========= ======== ========

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

12. Events Occurring Subsequent to Independent Auditors' Report (unaudited)     

 On October 25, 2000, the Company issued $75,000 in convertible subordinated
notes. These notes bear an interest rate of 5.25% until October 31, 2001, after 
which time the notes will bear interest at 6.25% through maturity (November 1,  
2005) or date of redemption or repurchase. If the Company does not complete a   
Complying Equity Offering by November 1, 2003, the holders may require the      
Company to redeem their notes at a price that would provide the holder an       
annual return for all periods of 15%. The notes are convertible at any time on  
or after the 90th day following the Company's Complying Public Equity Offering, 
as defined in the note agreement, and prior to maturity into common stock at a  
conversion price of $38.12 per share, subject to adjustment upon certain        
events, including, without limitation, a reduction in the conversion price with 
respect to a Complying Public Equity Offering. Note holders may require the     
Company to repurchase their notes upon a repurchase event, as defined in the    
note agreement, or if a Complying Public Equity Offering has not occurred on or 
before November 1, 2003 at the purchase prices ranging from 105% to 137.27% of  
the principal amount as set forth in the note agreement. The Company received   
proceeds; net of discounts, commissions, and estimated offering costs, of       
approximately $70,000.                                                          

On March 28, 2001 the board of directors approved and the Company entered 
into an agreement and plan of merger (the Agreement) with Ariel Corporation     
("Ariel") (Nasdaq:adsp) of Cranbury, New Jersey. As a result of the merger, the 
Company will merge with and into Ariel Corporation and the shareholders of the  
Company will become stockholders of Ariel. Pursuant to the Agreement, Ariel     
will effect a reverse stock split and issue additional shares to Company        
shareholders, option holders and warrant holders such that Company              
shareholders, option holders and warrant holders will control approximately 90% 
of the new entity's voting stock. For the merger to be approved, the holders of 
a majority of the outstanding shares of the Company's common stock and the      
holders of a majority of the outstanding shares of the Company's preferred      
stock must approve the merger agreement. Additionally, the holders of the       
Company's preferred stock must voluntarily convert their stock into the         
Company's common stock pursuant to Article III, Section B(4)(b)(ii) of the      
Company's Amended and Restated Articles of Incorporation immediately prior to   
the closing of the merger.                                                      

The merger will be accounted for under the purchase method. Because the   
Company will own approximately 90% of the common stock of Ariel (on a diluted   
basis) after the merger, the merger will be accounted for as a reverse          
acquisition which results in the Company being the acquirer of Ariel for        
accounting purposes.                                                            

The Agreement also requires the Company to provide up to $2,000 in debt   
financing to Ariel under a Promissory Note (the "Note") on an as needed basis   
until the transaction is consummated or otherwise terminated. In the event the  
Company chooses to terminate the merger agreement due to a superior offer, the  
Note becomes a term note with any principal and accrued interest payable on the 
one year anniversary of the termination. Should the merger agreement otherwise  
terminate, amounts due on the Note would be due and payable upon termination.   

Ariel must maintain certain representations and warranties and not be in  
breach of the covenants of the merger agreement to borrow funds against the     
Note. The Note has an annual interest rate of 8% and may be secured by          
subordinated security agreements on Ariel's tangible assets and intellectual    
property.                                                                       

  As of March 31, 2001 the Company had funded $300 and this amount is recorded
in other assets in the accompanying balance sheet. An additional $1,700 has     
been provided under the note subsequent to March 31, 2001.                      

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

The consummation of the transaction requires, among other things, the     
approval of the plan of merger by shareholders of both companies, the filing    
and effectiveness of a registration statement with the Securities and Exchange  
Commission on Form S-4 covering the shares to be issued in the merger and the   
listing of those shares on the NASDAQ National Market.                          

The Company expects to complete the transaction by the third calendar     
quarter of 2001.                                                                

 In March 2001, the Company's shareholders approved an increase of 2,000,000
shares to the Company's 1998 Stock Option/Stock Issuance Plan (the "Plan").     
Total shares available under the plan are 12,985,937.                           

On May 18, 2001 the Company entered into an agreement with a contract     
manufacturer related to assembly of the Company's products and purchase of the  
related raw materials. Under this agreement, the Company will purchased         
finished products in the normal course of business and the Company may be       
obligated to purchase certain excess or obsolete materials purchased by the     
manufacturer at the request of the Company. As of May 18, 2001, approximately   
$5,000 of raw materials is held by the manufacturer for possible use in         
assembling the Company's products; however, no significant amount of these raw  
materials is considered excess or obsolete by the Company.                      

 On May 22, 2001, the Company made an offer to its current subordinated note
holders to exchange the $75,000 of convertible subordinated notes for $50,000   
of exchange notes with terms including the following:                           

.  The exchange notes will bear interest at 7.875% and will be payable in 
 2005. The interest is payable semiannually in cash or common stock of
the Company then currently traded on a U.S. national securities     
 exchange. If the Company pays the interest with its common stock, the
shares will be valued at approximately 90% of the then fair market  
value.                                                              

.  The exchange notes will be convertible into common stock of the        
Company by the holders of the notes at an initial price of $5.00 per
share (Conversion Price-subject to certain adjustments as defined). 
The exchange notes will be converted into common stock at the option
of the Company if: (i) the Company's common stock becomes publicly  
 traded (such is through the contemplated merger with Ariel), (ii) the
Company registers additional shares of its common stock to be issued
 upon conversion of the exchange notes, and (iii) the Company's common
 stock price exceeds 200% of the Conversion Price for at least 20 days
 during a 30 day period. The Company may be required to pay additional
interest to the holders of the exchange notes upon voluntary a      
conversion by the holders prior to November 1, 2003.                

. The Company will have the option to redeem the exchange notes on or     
after November 1, 2003 at an amount ranging from 101.575% to 103.150% 
of the principal amount plus accrued and unpaid interest. In the event
of a (i) change in control of the Company or (ii) a delisting of the  
 Company's common stock (after the Ariel merger or an alternative public
merger or complying public equity offering as defined), the holders of
the exchange notes may require the Company to repurchase the exchange 
 notes at 105% of the principal amount plus accrued and unpaid interest.

. The holders of the exchange notes may require the Company to repurchase 
the exchange notes at 37.5% of the principal amount plus accrued and  
unpaid interest prior to the earlier of (i) 90 days following the     
effective date of a shelf registration statement covering a resale of 
the exchange notes                                                    

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MAYAN NETWORKS CORPORATION
(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

(Information as of March 31, 2001, the nine months ended March 31, 2000 and 
2001 and the period from
July 30, 1997 (Inception) through March 31, 2001 is unaudited)
(Dollars in thousands, except per share amounts)

and common stock into which the exchange notes are convertible following
the Ariel merger (or an Alternative Public Merger or Complying Public   
Equity Offering), (ii) the closing of an Alternative Merger (as defined)
and (iii) January 10, 2002, if at the close of business on December 31, 
2001 the Company has not closed the Ariel merger (or an Alternative     
Public Merger or Complying Public Equity Offering). This repurchase     
option could require the Company to make a cash payment of up to        
approximately $18,750 to repay the exchange notes and will result in the
exchange notes being classified as a current liability in the Company's 
balance sheet until this repurchase option expires.                     

. If the Company does not complete the contemplated merger with Ariel by  
December 31, 2001, the holders of the exchange notes will have the    
option to change the terms of the exchange notes to terms that are    
consistent with the currently outstanding $75,000 convertible         
subordinated notes.                                                   

The note exchange, when and if completed, and assuming completion of the  
Ariel merger by December 31, 2001, will result in the Company recording a one-  
time extraordinary gain in an amount determined upon completion of these        
events.                                                                         

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APPENDICES

                                                        [Enlarge/Download Table]
                                                                                                     
APPENDIX I     --Agreement and Plan of Merger                                                        
APPENDIX II    --Form of Ariel Voting Agreement                                                      
APPENDIX III   --Form of MAYAN Voting Agreement                                                      
APPENDIX IV    --Form of Employment Agreement                                                        
APPENDIX V     --Form of Market Standoff Agreement                                                   
APPENDIX VI    --Form of 2001 Stock Incentive Plan                                                   
APPENDIX VII   --Opinion of Needham & Company, Inc., financial advisor to Ariel Corporation          
APPENDIX VIII  --Opinion of Robertson Stephens, Inc., financial advisor to MAYAN Networks Corporation
APPENDIX IX    --Form of Ariel Proxy Card                                                            
APPENDIX X     --Form of MAYAN Proxy Card                                                            

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                                                                      APPENDIX I

AGREEMENT AND PLAN OF MERGER

by and between

ARIEL CORPORATION 

and 

MAYAN NETWORKS CORPORATION

Dated as of March 28, 2001

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TABLE OF CONTENTS 

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ARTICLE I DEFINITIONS.....................................................    2 
SECTION 1.01 Certain Defined Terms.......................................     2 

ARTICLE II THE MERGER.....................................................    7 
SECTION 2.01 The Merger..................................................     7 
SECTION 2.02 Closing.....................................................     7 
SECTION 2.03 Effective Time..............................................     7 
SECTION 2.04 Effect of the Merger........................................     7 
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers       
              of Surviving Corporation and Directors and Officers of            
              Parent.....................................................     8 
SECTION 2.06 Charter Amendments..........................................     8 

ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES............    8 
SECTION 3.01 Conversion of Shares........................................     8 
SECTION 3.02 Exchange of Shares Other than Treasury Shares...............     9 
SECTION 3.03 Stock Transfer Books........................................    10 
SECTION 3.04 No Fractional Share Certificates............................    10 
SECTION 3.05 Options to Purchase Company Common Stock....................    10 
SECTION 3.06 Certain Adjustments.........................................    11 
SECTION 3.07 Lost, Stolen or Destroyed Certificates......................    11 
SECTION 3.08 Taking of Necessary Action; Further Action..................    11 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY......................   12 
SECTION 4.01 Organization and Qualification; Subsidiaries................    12 
SECTION 4.02 Articles of Incorporation and Bylaws........................    12 
SECTION 4.03 Capitalization..............................................    12 
SECTION 4.04 Authority Relative to this Agreement........................    13 
SECTION 4.05 No Conflict; Required Filings and Consents..................    13 
SECTION 4.06 Permits; Compliance with Laws...............................    13 
SECTION 4.07 Financial Statements........................................    14 
SECTION 4.08 Certain Tax Matters.........................................    14 
SECTION 4.09 Litigation..................................................    14 
SECTION 4.10 Affiliates..................................................    14 
SECTION 4.11 Brokers.....................................................    14 
SECTION 4.12 Information Supplied........................................    15 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT........................   15 
SECTION 5.01 Organization and Qualification; Subsidiaries................    15 
SECTION 5.02 Certificate of Incorporation and Bylaws.....................    15 
SECTION 5.03 Capitalization..............................................    16 
SECTION 5.04 Authority Relative to this Agreement........................    17 
SECTION 5.05 No Conflict; Required Filings and Consents..................    17 
SECTION 5.06 Permits; Compliance with Laws...............................    17 
SECTION 5.07 SEC Filings; Financial Statements...........................    18 
SECTION 5.08 Certain Tax Matters.........................................    19 
SECTION 5.09 Litigation..................................................    19 
SECTION 5.10 Absence of Certain Changes or Events........................    19 
SECTION 5.11 Employee Benefit Plans......................................    20 
SECTION 5.12 Employment and Labor Matters................................    21 
SECTION 5.13 Contracts...................................................    22 
SECTION 5.14 Business Relationships......................................    23 

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SECTION 5.15 Environmental Matters.......................................   23 
SECTION 5.16 Intellectual Property.......................................   23 
SECTION 5.17 Taxes.......................................................   24 
SECTION 5.18 Insurance...................................................   25 
SECTION 5.19 Properties..................................................   25 
SECTION 5.20 Employees...................................................   25 
SECTION 5.21 Parent Rights Plan..........................................   25 
SECTION 5.22 Certain Business Practices..................................   26 
SECTION 5.23 Books and Records...........................................   26 
SECTION 5.24 Opinion of Financial Advisor................................   26 
SECTION 5.25 Affiliates..................................................   26 
SECTION 5.26 Brokers.....................................................   26 
SECTION 5.27 Information Supplied........................................   26 

ARTICLE VI COVENANTS......................................................  27 
SECTION 6.01 Conduct of Parent Pending the Closing.......................   27 
SECTION 6.02 Conduct of Company Pending the Closing......................   28 
SECTION 6.03 Notices of Certain Events...................................   28 
SECTION 6.04 Access to Information; Confidentiality......................   29 
SECTION 6.05 Reorganization..............................................   29 
SECTION 6.06 Further Action; Consents; Filings...........................   29 
SECTION 6.07 Additional Reports..........................................   30 

ARTICLE VII ADDITIONAL AGREEMENTS.........................................  30 
SECTION 7.01 Joint Proxy Statement/Prospectus............................   30 
SECTION 7.02 Shareholders' Meetings......................................   32 
SECTION 7.03 Directors' and Officers' Indemnification and Insurance......   32 
SECTION 7.04 Public Announcements........................................   33 
SECTION 7.05 Voting Agreements...........................................   33 
SECTION 7.06 Employment Agreements.......................................   33 
SECTION 7.07 Market Standoff Agreements..................................   33 
SECTION 7.08 Market Standoff Agreements..................................   33 
SECTION 7.09 NNM Listing.................................................   33 
SECTION 7.10 Blue Sky....................................................   34 
SECTION 7.11 Reservation of Shares.......................................   34 
SECTION 7.12 2001 Stock Incentive Plan...................................   34 
             Waiver from Certain Holders of Outstanding Parent Stock           
SECTION 7.13 Options.....................................................   34 
SECTION 7.14 Registration Statements on Form S-8.........................   34 
SECTION 7.15 Employee Matters............................................   34 
SECTION 7.16 Parent Rights Plan..........................................   35 
SECTION 7.17 Filing of Reports Necessary for Use of Rule 145.............   35 
SECTION 7.18 Resignations of Officers and Directors......................   35 
SECTION 7.19 No Solicitation.............................................   35 
SECTION 7.20 Notice of Merger............................................   36 
SECTION 7.21 Registration Statement for Convertible Subordinated               
              Promissory Notes, Exchange Notes and Underlying Conversion       
              Shares.....................................................   36 
SECTION 7.22 Compensation Committee Ratification.........................   37 
SECTION 7.23 Bridge Loan.................................................   37 

ARTICLE VIII CONDITIONS TO THE MERGER.....................................  37 
             Conditions to the Obligations of Each Party to Consummate         
SECTION 8.01 the Merger..................................................   37 
SECTION 8.02 Conditions to the Obligations of Company....................   38 
SECTION 8.03 Conditions to the Obligations of Parent.....................   40 

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ARTICLE IX TERMINATION, AMENDMENT AND WAIVER..............................  41 
SECTION 9.01  Termination................................................   41 
SECTION 9.02  Effect of Termination......................................   42 
SECTION 9.03  Amendment..................................................   42 
SECTION 9.04  Waiver.....................................................   42 
SECTION 9.05  Termination Fee; Expenses..................................   43 

ARTICLE X GENERAL PROVISIONS..............................................  43 
SECTION 10.01 Non-Survival of Representations and Warranties.............   43 
SECTION 10.02 Notices....................................................   43 
SECTION 10.03 Severability...............................................   44 
SECTION 10.04 Assignment; Binding Effect; Benefit........................   44 
SECTION 10.05 Incorporation of Annexes...................................   44 
SECTION 10.06 Governing Law..............................................   44 
SECTION 10.07 Jurisdiction; Waiver of Jury Trial.........................   44 
SECTION 10.08 Headings; Interpretation...................................   45 
SECTION 10.09 Counterparts...............................................   45 
SECTION 10.10 Entire Agreement...........................................   45 

ANNEXES                                                                         

                                                                [Download Table]
                                   
ANNEX A Parent Voting Agreement    
ANNEX B Company Voting Agreement   
ANNEX C Employment Agreement       
ANNEX D Market Standoff Agreement  
ANNEX E Opinion of Parent's Counsel
ANNEX F 2001 Stock Incentive Plan  
ANNEX G Bridge Loan                

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AGREEMENT AND PLAN OF MERGER

  AGREEMENT AND PLAN OF MERGER, dated as of March 28, 2001 (this "Agreement"),
among ARIEL CORPORATION, a Delaware corporation ("Parent") and MAYAN NETWORKS   
CORPORATION, a California corporation ("Company"):                              

WITNESSETH: 

WHEREAS, the disinterested members of the boards of directors of each of  
Parent and Company have unanimously determined that it is advisable and fair    
to, and in the best interests of their respective companies and shareholders or 
stockholders, as the case may be, to enter into a business combination by means 
of the merger (the "Merger") of the Company with and into Parent with Parent as 
the surviving corporation in which the shareholders of the Company will receive 
shares of Parent Common Stock (as defined in Section 3.01) and have approved    
this Agreement, and have recommended approval or adoption, as the case may be,  
of this Agreement to their shareholders or stockholders, as the case may be;    

WHEREAS, concurrently with the execution of this Agreement and as an      
inducement to Company to enter into this Agreement, certain stockholders of     
Parent have entered into a voting agreement ("Parent Voting Agreement") in the  
form attached hereto as Annex A, pursuant to which, among other things, each    
such stockholder agrees to vote in favor of adoption of this Agreement;         

WHEREAS, concurrently with the execution of this Agreement and as an      
inducement to Parent to enter into this Agreement, certain shareholders of      
Company have entered into a voting agreement ("Company Voting Agreement") in    
the form attached hereto as Annex B, pursuant to which, among other things,     
each such shareholder agrees to vote in favor of adoption of this Agreement;    

WHEREAS, concurrently with the consummation of the Merger and in order to 
induce Parent and Company to enter into this Agreement, certain key employees   
of Parent shall have entered into employment agreements (each an "Employment    
Agreement") to be effective as of the Effective Time (as defined below) in the  
form attached hereto as Annex C;                                                

WHEREAS, concurrently with the execution of this Agreement and as an      
inducement to Parent to enter into this Agreement, the Company and Parent have  
entered into the Bridge Loan ("Bridge Loan") in the form attached hereto as     
Annex G, along with the Security Agreement and the Intellectual Property        
Security Agreement attached thereto, pursuant to which, among other things,     
Company has agreed to provide bridge financing to Parent for the period between 
the date hereof and the earlier of the termination of the Agreement and the     
Closing Date and in return Parent has agreed to provide a security interest in  
the Parent assets and Intellectual Property to Company (as defined below);      

WHEREAS, concurrently with and as a condition to the consummation of the  
Merger, Company and Parent will, in connection with the Company's 5%            
Convertible Subordinated Notes due 2005 (the "Convertible Subordinated          
Promissory Notes"), enter into a supplemental indenture which shall accommodate 
the consummation of the Merger in a manner consistent with the requirements of  
that certain Indenture, dated as of October 25, 2000, by and between Company    
and United States Trust Company of New York (the "Indenture");                  

WHEREAS, concurrently with the consummation of the Merger, the Company    
intends to offer to the Noteholders (as defined below) new convertible          
subordinated promissory notes (the "Exchange Notes") in exchange for the        
existing Convertible Subordinated Promissory Notes;                             

WHEREAS, concurrently with and as a condition to the consummation of the  
Merger, Company and Parent shall have entered into such documents as shall be   
necessary to provide for the offering of the Exchange Notes on such terms as    
shall be satisfactory to the parties and shall otherwise have taken or cause to 
be taken all such action as shall be required in connection therewith; and      

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 WHEREAS, for United States Federal income tax purposes, it is intended that
the Merger shall qualify as a "reorganization" within the meaning of Section    
368(a) of the Internal Revenue Code of 1986, as amended (together with the      
rules and regulations promulgated thereunder, the "Code"), and that this        
Agreement shall be, and hereby is, adopted as a "plan of reorganization" for    
purposes of Section 368 of the Code.                                            

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, intending to be legally  
bound hereby, the parties hereto hereby agree as follows:                       

ARTICLE I 

DEFINITIONS 

Section 1.01 Certain Defined Terms. Unless the context otherwise requires,
the following terms, when used in this Agreement, shall have the respective     
meanings specified below (such meanings to be equally applicable to the         
singular and plural forms of the terms defined):                                

 "Acquisition Proposal" shall mean any offer or proposal with respect to the
following involving Parent or any Parent Subsidiary, as the case may be (other  
than the Merger):                                                               

(i) any merger, consolidation, share exchange, business combination or
other similar transaction;                                                  

 (ii) any sale, lease, exchange, transfer or other disposition of 15% or
more of the assets of Parent or any Parent Subsidiary, taken as a whole, in 
a single transaction or series of transactions, or the sale, lease,         
exchange, transfer or other disposition of any asset of Parent or any       
Parent Subsidiary, the absence of which would materially diminish the value 
of the Merger to the Company or the benefits expected by the Company to be  
realized from the Merger;                                                   

(iii) any tender offer or exchange offer for 15% or more of the       
outstanding voting securities of Parent or any Parent Subsidiary or the     
filing of a registration statement under the Securities Act in connection   
therewith;                                                                  

(iv) any Person having acquired beneficial ownership or the right to  
acquire beneficial ownership of, or any "group" (as such term is defined    
under Section 13(d) of the Exchange Act) having been formed which           
beneficially owns or has the right to acquire beneficial ownership of, 15%  
or more of the outstanding voting securities of Parent or any Parent        
Subsidiary;                                                                 

 (v) any solicitation in opposition to the approval of this Agreement by
the shareholders of such party; or                                          

 (vi) any public announcement of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the foregoing.        

"Affiliate" shall mean, with respect to any Person, any other Person that 
controls, is controlled by or is under common control with such Person.         

"Aggregate Common Number" shall mean the aggregate number of shares of    
Company Common Stock which are (or would be) outstanding immediately prior to   
the Effective Time (including all shares of Company Common Stock issued or      
issuable upon conversion of all shares of Company Preferred Stock and upon      
exercise, conversion or exchange in full or all unvested and vested Company     
Stock Options, Company Warrants and other Company Rights (as defined below)     
which remain outstanding and are not exercised, converted, exchanged or expired 
as of the Effective Time, excluding the Convertible Subordinated Promissory     
Notes); provided, that solely for purposes of calculating the Aggregate Common  
Number, it shall be assumed (i) that all such Company Stock Options, Company    
Warrants and other Company Rights are exercised in full by means of a cash      
exercise and not be means of a net exercise, whether or not such Company Stock  
Options, Company Warrants and other Company Rights are in fact so exercised,    
and (ii) the number of Company Stock                                            

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Options outstanding as of the Effective Time shall equal (A) the number of      
Company Stock Options outstanding as of the date of this Agreement, (B) plus    
the number of Company Stock Options granted after the date of this Agreement,   
(C) minus the number of Company Stock Options cancelled after the date of this  
Agreement in connection with bona fide terminations of Company employees, and   
(D) minus the number of Company Stock Options exercised for shares of Common    
Stock (to the extent that the resulting shares are issued and outstanding as of 
the Effective Time).                                                            

"Aggregate Share Number" shall mean 168,305,346 shares of Parent Common   
Stock (which number represents an amount equal to nine times the fully diluted  
capitalization of Parent), plus the number of shares of Parent Common Stock     
obtained by dividing (a) the amount by which Parent's Expenses (excluding (i)   
any Expenses incurred in connection with the preparation, negotiation or filing 
of the Joint Proxy Statement/Prospectus or any other filing required in order   
to register securities that Company securityholders will receive on or after    
Closing and (ii) any fees, if any, issuable to Pennsylvania Merchant Group      
pursuant to that certain letter agreement dated as of May 18, 2000) exceed      
$750,000 by (b) the Final Average Closing Price.                                

"Blue Sky Laws" shall mean United States state securities or "blue sky"   
laws.                                                                           

 "Bridge Loan" shall mean the loan agreement entered into between Parent and
Company as of the date hereof.                                                  

 "Business Day" shall mean any day on which the principal offices of the SEC
in Washington, D.C. are open and any day on which banks are not required or     
authorized by law or executive order to close in The City of New York.          

"California Law" shall mean the General Corporation Law of the State of   
California.                                                                     

"Company Disclosure Schedule" shall mean the disclosure schedule delivered
by Company to Parent prior to the execution of this Agreement and forming a     
part hereof.                                                                    

"Company Financial Advisor" shall mean Robertson Stephens, Inc.           

 "Company Material Adverse Effect" shall mean any change in or effect on the
business of Company that, individually or in the aggregate (taking into account 
all other such changes or effects), is, or is reasonably likely to be,          
materially adverse to the business, assets, liabilities, financial condition or 
results of operations of Company. Notwithstanding the foregoing, none of the    
following shall be deemed, in and of itself, to constitute a Company Material   
Adverse Effect: any event, violation, inaccuracy, circumstance or other matter  
that results from conditions affecting the economy in general or conditions     
affecting the industry in which the Company operates.                           

"Company Preferred Stock" shall mean the Series A Preferred Stock, the    
Series B Preferred Stock, the Series C Preferred Stock and the Series D         
Preferred Stock.                                                                

"Company Stock Plan" shall mean the Company's 1998 Stock Option/Stock     
Issuance Plan.                                                                  

"Company Superior Proposal" shall mean, an unsolicited, bona fide written 
proposal that the board of directors of Company, prior to receipt of the        
approval by the shareholders of Company of this Agreement, has negotiated       
regarding any of the following transactions: (x) a merger, consolidation,       
business combination, recapitalization, liquidation, dissolution or similar     
transaction involving Company pursuant to which the shareholders of Company     
immediately preceding such transaction hold less than fifty percent of the      
equity interest in the surviving or resulting entity of such transaction; (y) a 
sale or other disposition by Company of assets (excluding dispositions in the   
ordinary course of business) representing all or substantially all of Company's 
assets, or (z) the acquisition by any person or group (including by way of a    
tender offer or an exchange offer or issuance by Company), directly or          
indirectly, of beneficial ownership or a right to acquire                       

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beneficial ownership of shares representing fifty percent or more of the voting 
power of the then outstanding shares of capital stock of Company, in each case  
on terms that, in the good faith judgment of the board of directors of Company  
(after consultation with an investment bank of nationally recognized            
reputation) are more favorable to Company shareholders than the Merger;         
provided, however, that a proposal shall only be a Company Superior Proposal if 
any financing required to consummate the transaction contemplated by such       
proposal is committed or is otherwise reasonably likely in the good faith       
judgment of Company's board of directors to be obtained by such third party on  
a timely basis.                                                                 

 "Confidentiality Agreement" shall mean the confidentiality agreement, dated
as of February 15, 2001, between Parent and Company.                            

"DGCL" shall mean the General Corporation Law of the State of Delaware, as
amended from time to time.                                                      

"$" shall mean United States Dollars.                                     

"Encumbrances" shall mean all claims, security interests, liens, pledges, 
charges, escrows, options, proxies, rights of first refusal, restrictions on    
transfer, preemptive rights, mortgages, hypothecations, prior assignments,      
title retention agreements, indentures, security agreements or any other        
encumbrance of any kind.                                                        

"Environmental Law" shall mean any Law and any enforceable judicial or    
administrative interpretation thereof, including any judicial or administrative 
order, consent decree or judgment, relating to pollution or protection of the   
environment or natural resources, including, without limitation, those relating 
to the use, handling, transportation, treatment, storage, disposal, release or  
discharge of Hazardous Material.                                                

"Environmental Permit" shall mean any permit, approval, identification    
number, license or other authorization required under or issued pursuant to any 
applicable Environmental Law.                                                   

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.                  

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.                 

"Exchange Ratio" shall mean the quotient obtained by dividing (a) the     
Aggregate Share Number by (b) the Aggregate Common Number.                      

  "Expenses" shall mean, with respect to any party hereto, all reasonable out-
of-pocket expenses (including, without limitation, all fees and expenses of     
counsel, accountants, investment bankers, experts and consultants to a party    
hereto and its affiliates, and all other fees and expenses of third parties     
("Third Party Expenses")) incurred by such party or on its behalf in connection 
with or related to the authorization, preparation, negotiation, execution and   
performance of its obligations pursuant to this Agreement and the consummation  
of the Merger, the preparation, printing and mailing of the Joint Proxy         
Statement/Prospectus (as defined in Section 7.1), the solicitation of           
stockholder approvals, the filing of HSR Act notice, if any, and all other      
matters related to the transactions contemplated hereby and the closing of the  
Merger.                                                                         

  "Final Average Closing Price" shall mean the average closing price of Parent
Common Stock on the NNM for the ten consecutive trading days ending on and      
including the third Business Day prior to the date of the Closing.              

  "GAAP" shall mean United States generally accepted accounting principles, as
in effect from time to time.                                                    

"Governmental Entity" shall mean any United States Federal, state or local
or foreign governmental, regulatory or administrative authority, agency or      
commission or any court, tribunal or arbitral body.                             

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"Governmental Order" shall mean any order, writ, judgment, injunction,    
decree, stipulation, determination or award entered by or with any Governmental 
Entity.                                                                         

"Hazardous Material" shall mean (i) any petroleum, petroleum products, by-
products or breakdown products, radioactive materials, friable asbestos-        
containing materials or polychlorinated biphenyls or (ii) any chemical,         
material or substance defined or regulated as toxic or hazardous or as a        
pollutant or contaminant or waste under any applicable Environmental Law.       

"HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, together with the rules and regulations promulgated thereunder.     

"Intellectual Property" shall mean all United States, foreign and         
international patents; trademarks, service marks and trade names (including     
without limitation all goodwill pertaining thereto), designs, trade dress and   
Internet domain names; copyrights; sui generis database rights; ideas,          
inventions, technology, know-how, trade secrets, systems, processes, works of   
authorship, databases, mask works, content, graphics, statistical models,       
algorithms, modules, computer programs, computer software, source and object    
code of such software, technical documentation, business methods, work product, 
intellectual and industrial property licenses, and all other tangible or        
intangible information or materials.                                            

"IRS" shall mean the United States Internal Revenue Service.              

  "Knowledge of Company" shall mean that any officer or director of Company is
actually aware of a fact or other matter, or should have been aware of a fact   
or other matter based upon due inquiry and investigation.                       

"Knowledge of Parent" shall mean that any officer or director of Parent is
actually aware of a fact or other matter, or should have been aware of a fact   
or other matter based upon due inquiry and investigation.                       

"Law" shall mean any Federal, state, foreign or local statute, law,       
ordinance, regulation, rule, code, order, judgment, decree, other requirement   
or rule of law of the United States, or any other jurisdiction, and any other   
similar act or law.                                                             

"NNM" shall mean The Nasdaq National Market.                              

  "Noteholder" shall mean each holder of a Convertible Subordinated Promissory
Note.                                                                           

  "Parent Disclosure Schedule" shall mean the disclosure schedule delivered by
Parent to Company prior to the execution of this Agreement and forming a part   
hereof.                                                                         

"Parent Financial Advisor" shall mean Needham & Company, Inc.             

 "Parent Intellectual Property" shall mean all Intellectual Property that is
currently used in Parent's business or the business of any Parent Subsidiary.   

"Parent Material Adverse Effect" shall mean any change in or effect on the
business of Parent or the Parent Subsidiaries that, individually or in the      
aggregate (taking into account all other such changes or effects), is, or is    
reasonably likely to be, materially adverse to the business, assets,            
liabilities, prospects, financial condition or results of operations of Parent  
and the Parent Subsidiaries, taken as a whole. Notwithstanding the foregoing,   
none of the following shall be deemed, in and of itself, to constitute a Parent 
Material Adverse Effect: any event, violation, inaccuracy, circumstance or      
other matter that results from conditions affecting the economy in general or   
conditions affecting the industry in which the Parent or the Parent             
Subsidiaries operate.                                                           

"Parent Stock Plans" shall mean the 1992 Stock Option and Restricted Stock
Plan, the 1994 Stock Option Plan, 1995 Stock Option Plan and the 1996 Directors 
Stock Option Plan.                                                              

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"Parent Superior Proposal" shall mean, an unsolicited, bona fide written  
proposal that the board of directors of Parent, prior to receipt of the         
approval by the stockholders of Parent of this Agreement and the Merger, has    
negotiated regarding any of the following transactions: (x) a merger,           
consolidation, business combination, recapitalization, liquidation, dissolution 
or similar transaction involving Parent pursuant to which the stockholders of   
Parent immediately preceding such transaction hold less than fifty percent of   
the equity interest in the surviving or resulting entity of such transaction;   
(y) a sale or other disposition by Parent of assets (excluding dispositions in  
the ordinary course of business) representing all or substantially all of       
Parent's assets, or (z) the acquisition by any person or group (including by    
way of a tender offer or an exchange offer or issuance by Parent), directly or  
indirectly, of beneficial ownership or a right to acquire beneficial ownership  
of shares representing fifty percent or more of the voting power of the then    
outstanding shares of capital stock of Parent, in each case on terms that, in   
the good faith judgment of the board of directors of Parent (after consultation 
with an investment bank of nationally recognized reputation) are more favorable 
to Parent stockholders than the Merger; provided, however, that a proposal      
shall only be a Parent Superior Proposal if any financing required to           
consummate the transaction contemplated by such proposal is committed or is     
otherwise reasonably likely in the good faith judgment of Parent's board of     
directors to be obtained by such third party on a timely basis.                 

"Permitted Encumbrances" shall mean (i) liens for Taxes, assessments and  
other governmental charges not yet due and payable, (ii) immaterial unfiled     
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like     
liens arising or incurred in the ordinary course of business which are not yet  
due and payable and (iii) equipment leases with third parties entered into in   
the ordinary course of business.                                                

"Person" shall mean an individual, corporation, partnership, limited      
partnership, limited liability company, syndicate, person (including, without   
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),     
trust, association, entity or government or political subdivision, agency or    
instrumentality of a government.                                                

"Reverse Stock Split" shall mean a reverse split of the common stock of   
Parent, to be effective immediately prior to the Effective Time, in which each  
share of the common stock of Parent, including shares of common stock of Parent 
issuable upon exercise of Parent Stock Options and Parent Warrants, will be     
exchangeable for shares of the common stock of Parent, at a ratio to be         
mutually agreed upon by Company and Parent.                                     

"SEC" shall mean the United States Securities and Exchange Commission.    

  "Securities Act" shall mean the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.                          

"Series A Preferred Stock" shall mean the Series A Preferred Stock, $.0001
par value, of Company.                                                          

"Series B Preferred Stock" shall mean the Series B Preferred Stock, $.0001
par value, of Company.                                                          

"Series C Preferred Stock" shall mean the Series C Preferred Stock, $.0001
par value, of Company.                                                          

"Series D Preferred Stock" shall mean the Series D Preferred Stock, $.0001
par value, of Company.                                                          

"Subsidiary" shall mean, with respect to any Person, any corporation,     
limited liability company, partnership, joint venture or other legal entity of  
which such Person (either alone or through or together with any other           
subsidiary of such Person) owns, directly or indirectly, a majority of the      
stock or other equity interests, the holders of which are generally entitled to 
vote for the election of the board of directors or other governing body of such 
corporation or other legal entity.                                              

"Tax" shall mean (i) any and all taxes, fees, levies, duties, tariffs,    
imposts and other charges of any kind (together with any and all interest,      
penalties, additions to tax and additional amounts imposed with respect         

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thereto) imposed by any Governmental Entity or other taxing authority ("Taxing  
Authority"), including, without limitation, taxes or other charges on or with   
respect to income, franchises, windfall or other profits, gross or net          
receipts, property, sales, use, capital stock, payroll, employment, social      
security, workers' compensation, unemployment compensation or net worth; taxes  
or other charges in the nature of excise, withholding, ad valorem, stamp,       
transfer, value-added or gains taxes; license, registration and documentation   
fees; and customers' duties, tariffs and similar charges; (ii) any liability    
for the payment of any amounts of the type described in (i) as a result of      
being a member of an affiliated, combined, consolidated or unitary group for    
any taxable period; and (iii) any liability for the payment of amounts of the   
type described in (i) or (ii) as a result of being a transferee of, or a        
successor in interest to, any Person or as a result of an express or implied    
obligation to indemnify any Person.                                             

"Tax Return" shall mean any return, statement or form (including, without 
limitation, any estimated tax report or return, withholding tax report or       
return or information report or return) required to be filed with respect to    
any Taxes.                                                                      

"Trustee" shall have the meaning set forth in the Indenture.              

ARTICLE II

THE MERGER

SECTION 2.01 The Merger. Upon the terms and subject to the conditions set 
forth in this Agreement, and in accordance with California Law and the DGCL, at 
the Effective Time, the Company shall be merged with and into Parent. As a      
result of the Merger, the separate corporate existence of the Company shall     
cease and Parent shall continue as the surviving corporation of the Merger (the 
"Surviving Corporation").                                                       

SECTION 2.02 Closing. Unless this Agreement shall have been terminated and
the Merger herein contemplated shall have been abandoned pursuant to Section    
9.01 and subject to the satisfaction or waiver of the conditions set forth in   
Article VIII, the consummation of the Merger shall take place as promptly as    
practicable (and in any event within five Business Days) after satisfaction or  
waiver of the conditions set forth in Article VIII, at a closing (the           
"Closing") to be held at the offices of Brobeck, Phleger & Harrison LLP,        
2200 Geng Road, Two Embarcadero Place, Palo Alto, CA 94303, unless another      
date, time or place is agreed to by Parent and Company.                         

SECTION 2.03 Effective Time. At the Closing, the parties shall cause the  
Merger to be consummated by filing (a) a certificate of Merger (the             
"Certificate of Merger") with the Secretary of State of the State of Delaware   
in accordance with the DGCL and (b) an agreement of merger in such form as is   
required by the applicable provisions of California Law (the "Agreement of      
Merger") with the Secretary of State of the State of California executed in     
accordance with the relevant provisions of California Law (the later of the     
date and time of the filing of the Agreement of Merger and Certificate of       
Merger, or such later date and time as may be set forth therein, being the      
"Effective Time").                                                              

 SECTION 2.04 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of California Law and  
the DGCL. Without limiting the generality of the foregoing, and subject         
thereto, at the Effective Time, except as otherwise provided herein, all the    
property, rights, privileges, powers and franchises of each of the Company and  
Parent shall vest in Parent as the Surviving Corporation, and all debts,        
liabilities and duties of each of Company and Parent shall become the debts,    
liabilities and duties of Parent as the Surviving Corporation.                  

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  SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers of
Surviving Corporation and Directors and Officers of Parent. Unless otherwise    
agreed by Parent and Company before the Effective Time, at the Effective Time:  

(a) subject to the requirements of Section 7.03(a), the certificate of
incorporation and the bylaws of Parent as in effect immediately prior to    
the Effective Time shall be the certificate of incorporation and the bylaws 
of the Surviving Corporation, until thereafter amended as provided by Law   
and such certificate of incorporation or bylaws; provided, however, that    
Article I of the certificate of incorporation of the Surviving Corporation  
shall be amended to read as follows: "The name of the corporation is MAYAN  
NETWORKS CORPORATION";                                                      

(b) the officers of the Surviving Corporation shall be those persons  
listed on Schedule I hereto, in each case until their successors are        
elected or appointed and qualified or until their resignation or removal,   
and Parent shall deliver at the Closing the voluntary resignations of each  
officer of Parent from their positions as officers who is not designated to 
be an officer of Parent in accordance with this subsection 2.05(b) which    
resignation shall be effective at the Effective Time; and                   

(c) the directors of the Surviving Corporation shall be those persons 
listed on Schedule II hereto, in each case until their successors are       
elected or appointed and qualified or until their resignation or            
removal, and Parent shall deliver at the Closing the voluntary resignations 
of each director of Parent from their positions as directors who is not     
designated to be a director of Parent in accordance with this subsection    
2.05(c) which resignation shall be effective at the Effective Time.         

  SECTION 2.06 Charter Amendments. Contemporaneously with or immediately prior
to the Closing, the name of Parent will be changed to "Mayan Networks           
Corporation", and the certificate of incorporation of Parent, (i) accomplishing 
the creation of the Parent Common Stock for issuance in connection with the     
conversion of the Company Common Stock, Company Stock Options, Company Warrants 
and the conversion of the Convertible Subordinated Promissory Notes and (ii)    
effecting the Reverse Stock Split of the Parent Common Stock, will become       
effective.                                                                      

ARTICLE III 

CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

SECTION 3.01 Conversion of Shares. At the Effective Time, by virtue of the
Merger, and without any action on the part of Parent, Company or the holders of 
any of the following securities:                                                

(a) Each share of Common Stock, $.0001 par value, of Company ("Company
Common Stock"), issued and outstanding immediately before the Effective     
Time (including shares of Company Common Stock issued upon conversion of    
Company Preferred Stock as provided in Section 3.01(c), but excluding those 
held in the treasury of Company and all rights in respect thereof, shall,   
forthwith cease to exist and be converted into the right to receive such    
number of shares of Common Stock, $.001 par value per share, of Parent      
("Parent Common Stock"), equal to the Exchange Ratio, and cash in lieu of   
fractional shares pursuant to Section 3.04.                                 

(b) Each share of Company Common Stock held in the treasury of Company
immediately prior to the Effective Time shall be canceled and retired and   
no shares of stock or other securities of Parent, the Surviving Corporation 
or any other corporation shall be issuable, and no payment of other         
consideration shall be made, with respect thereto.                          

(c) Subject to the requisite approval of the holders of Company       
Preferred Stock, each share of (i) Series A Preferred Stock, (ii) Series B  
Preferred Stock, (iii) Series C Preferred Stock and (iv) Series D Preferred 
Stock issued and outstanding immediately before the Effective Time, shall,  
prior to the Effective Time be converted in accordance with its terms into  
Company Common Stock and become exchangeable for the number of shares of    
Parent Common Stock and cash in lieu of fractional shares pursuant to       
Section 3.04 as set forth in Section 3.01(a).                               

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SECTION 3.02 Exchange of Shares Other than Treasury Shares.               

(a) Exchange Agent. As of the Effective Time, Parent shall enter into an  
agreement with a bank or trust company reasonably acceptable to Company to act  
as exchange agent for the Merger (the "Exchange Agent").                        

(b) Parent to Provide Common Stock and Cash. Promptly after the Effective 
Time, Surviving Corporation shall make available to the Exchange Agent for the  
benefit of the holders of Company Common Stock and Company Preferred Stock: (i) 
certificates for Parent Common Stock ("Parent Certificates") representing the   
number of whole Parent Common Stock issuable pursuant to Section 3.01(a) in     
exchange for shares of Company Common Stock (including Company Common Stock     
issued in connection with the conversion of Company Preferred Stock pursuant to 
Section 3.01(c)) outstanding immediately prior to the Effective Time; and (ii)  
sufficient funds to permit payment in lieu of fractional shares pursuant to     
Section 3.04.                                                                   

(c) Exchange Procedures. The Exchange Agent shall mail to each holder of  
record of certificates representing shares of Company Common Stock and Company  
Preferred Stock ("Company Certificates"), whose shares were converted into the  
right to receive Parent Common Stock (and cash in lieu of fractional shares     
pursuant to Section 3.04) promptly after the Effective Time: (i) a form letter  
of transmittal in form and substance satisfactory to Company, such approval not 
to be unreasonably withheld (which shall specify that delivery shall be         
effected, and risk of loss and title to the Company Certificates shall pass,    
only upon receipt of the Company Certificates by the Exchange Agent, and shall  
be in such form and have such other provisions as Parent may reasonably         
specify); and (ii) instructions for use in effecting the surrender of the       
Company Certificates in exchange for Parent Certificates (and cash in lieu of   
any fractional share). Upon surrender of Company Certificates for cancellation  
to the Exchange Agent or to such other agent or agents as may be appointed by   
Parent, together with such letter of transmittal, duly completed and validly    
executed, and such other documents as may be reasonably required by the         
Exchange Agent, the holder of such Company Certificates shall be entitled to    
receive in exchange therefor a Parent Certificate representing the number of    
whole Parent Common Stock that such holder has the right to receive pursuant to 
this Article III and payment of cash in lieu of any fractional share which such 
holder has the right to receive pursuant to Section 3.04, and the Company       
Certificates so surrendered shall be canceled. Until so surrendered, each       
outstanding Company Certificate that, prior to the Effective Time, represented  
shares of Company Common Stock or Company Preferred Stock will be deemed from   
and after the Effective Time, for all purposes, to evidence the right to        
receive the number of full shares of Parent Common Stock into which such shares 
of Company Common Stock or Company Preferred Stock, as the case may be, shall   
have been so converted and the right to receive an amount in cash in lieu of    
the issuance of any fractional share in accordance with Section 3.04.           
Notwithstanding any other provision of this Agreement, no interest will be paid 
or will accrue on any cash payable to holders of Company Certificates pursuant  
to the provisions of this Article III.                                          

 (d) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions with respect to the Parent Common Stock with a record date after  
the Effective Time will be paid to the holder of any unsurrendered Company      
Certificate with respect to the Parent Common Stock represented thereby until   
the holder of record of such Company Certificate shall surrender such Company   
Certificate. Subject to the effect of applicable escheat or similar laws,       
following surrender of any such Company Certificate, there shall be paid to the 
record holder of the Parent Certificates issued in exchange therefor, without   
interest, at the time of such surrender, the amount of any such dividends or    
other distributions with a record date after the Effective Time theretofore     
payable (but for the provisions of this Section 3.02(d)) with respect to such   
shares of Parent Common Stock.                                                  

(e) Transfer of Ownership. If any Parent Certificate is to be issued in a 
name, or cash in lieu of a fractional share paid to a Person, other than that   
in which the Company Certificate surrendered in exchange therefor is            
registered, it will be a condition of the issuance and/or payment thereof that  
the Company Certificate so surrendered will be properly endorsed and otherwise  
in proper form for transfer and that the Person requesting such exchange will   
have paid to Parent or any agent designated by it any transfer or other taxes   
required by reason of the issuance of a Parent Certificate or payment of cash   
in lieu of fractional shares in any                                             

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name other than that of the registered holder of the Company Certificate        
surrendered, or established to the satisfaction of Parent or any agent          
designated by it that such tax has been paid or is not payable.                 

(f) Termination of Exchange Agent Funding. Any portion of funds (including
any interest earned thereon) or Parent Certificates held by the Exchange Agent  
which have not been delivered to holders of Company Certificates pursuant to    
this Article III within six months after the Effective Time shall promptly be   
paid or delivered, as appropriate, to Parent, and thereafter holders of Company 
Certificates who have not theretofore complied with the exchange procedures set 
forth in and contemplated by this Section 3.02 shall thereafter look only to    
Parent (subject to abandoned property, escheat and similar laws) only as        
general creditors thereof for their claim for shares of Parent Common Stock,    
any cash in lieu of fractional Parent Common Stock and any dividends or         
distributions (with a record date after the Effective Time) with respect to the 
shares of Parent Common Stock to which they are entitled.                       

(g) No Liability. Notwithstanding anything to the contrary in this Section
3.02, none of the Exchange Agent, the Surviving Corporation or any party hereto 
shall be liable to any Person in respect of any Parent Common Stock or cash     
delivered to a public official pursuant to any applicable abandoned property,   
escheat or similar law.                                                         

SECTION 3.03 Stock Transfer Books. As of the Effective Time, the stock    
transfer books of Company shall each be closed, and there shall be no further   
registration of transfers of shares of Company Common Stock or Company          
Preferred Stock thereafter on any such stock transfer books. In the event of a  
transfer of ownership of shares of Company Common Stock or Company Preferred    
Stock that is not registered in the stock transfer records of Company at the    
Effective Time, a certificate or certificates representing the number of full   
shares of Parent Common Stock into which such shares of Company Common Stock or 
Company Preferred Stock, as the case may be, shall have been converted shall be 
issued to the transferee together with a cash payment in lieu of fractional     
shares, if any, in accordance with Section 3.04, and a cash payment in the      
amount of dividends, if any, in accordance with Section 3.02(d), if the Company 
Certificates representing such shares of Company Common Stock or Company        
Preferred Stock (which shall have been converted into Company Common Stock), as 
the case may be, is or are surrendered as provided in Section 3.02(c),          
accompanied by all documents required to evidence and effect such transfer and  
by evidence of payment of any applicable stock transfer tax.                    

SECTION 3.04 No Fractional Share Certificates. No scrip or Parent         
Certificate representing a fractional share of Parent Common Stock shall be     
issued upon the surrender for exchange of Company Certificates, and an          
outstanding fractional share interest shall not entitle the owner thereof to    
vote, to receive dividends or to any rights of a stockholder of Parent or of    
Surviving Corporation with respect to such fractional share interest. As        
promptly as practicable following the Effective Time, Parent shall deposit with 
the Exchange Agent an amount in cash sufficient for the Exchange Agent to pay   
each holder of Company Common Stock an amount in cash, rounded to the nearest   
whole cent, equal to the product obtained by multiplying (i) the fractional     
share interest to which such holder would otherwise be entitled (after taking   
into account all shares of Company Common Stock held at the Effective Time by   
such holder) by (ii) the Final Average Closing Price. As soon as practicable    
after the determination of the amount of cash, if any, to be paid to holders of 
Company Common Stock with respect to any fractional share interests, the        
Exchange Agent shall make available such amounts, net of any required           
withholding taxes, to such holders of Company Common Stock, subject to and in   
accordance with the terms of Section 3.02 hereof.                               

SECTION 3.05 Options to Purchase Company Common Stock.                    

(a) At the Effective Time, each option granted by the Company to purchase 
shares of Company Common Stock outstanding under the Company Stock Plan,        
including options transferred to such plan from the Company's 1997 Stock Option 
Plan or otherwise listed on Schedule 3.05 of the Company Disclosure Schedule,   
whether vested or unvested ("Company Stock Options"), which is outstanding and  
unexercised immediately prior to the Effective Time and each warrant to         
purchase shares of Company Common Stock ("Company                               

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Warrants") which is outstanding and unexercised immediately prior to the        
Effective Time, shall be assumed by Parent and converted into an option or      
warrant, as the case may be, to purchase shares of Parent Common Stock in such  
number and at such exercise price as provided in (b) below but shall otherwise  
have the same terms and conditions as in effect immediately prior to the        
Effective Time (except to the extent that such terms, conditions and            
restrictions may be altered in accordance with their terms as a result of the   
Merger and except that all references in each such Company Stock Option or      
Company Warrant to Company shall be deemed to refer to Parent).                 

(b) The Company Stock Options or Company Warrants assumed by Parent:      

(i) shall be exercisable for that number of whole shares of Parent    
Common Stock equal to the product of (x) the number of shares of Company    
Common Stock that were issuable upon exercise of the Company Stock Option   
or Company Warrant immediately prior to the Effective Time and (y) the      
Exchange Ratio, rounded down, if necessary, to the next whole share; and    

(ii) shall have an exercise price per share of Parent Common Stock    
issuable upon exercise of the assumed option or warrant equal to (x) the    
exercise price per share of Company Common Stock at which the Company Stock 
Option or Company Warrant was exercisable immediately prior to the          
Effective Time divided by (y) the Exchange Ratio, rounded up, if necessary, 
to the next whole cent.                                                     

 Within 30 days after the Closing, Parent will issue to each Person, who
immediately prior to the Effective Time held a Company Stock Option or      
Company Warrant, a document evidencing the foregoing changes. It is the     
intention of the parties that the options so assumed by Parent qualify, to  
the maximum extent permissible, following the Effective Time as incentive   
stock options as defined in Section 422 of the Code to the extent such      
options qualified as incentive stock options prior to the Effective Time.   

(c) At the Effective Time, the Company Stock Plan shall be assumed by     
Parent.                                                                         

(d) All outstanding rights of the Company which it holds immediately prior
to the Effective Time to repurchase unvested shares of Company Common Stock     
(the "Repurchase Options") shall be assigned to Parent in the Merger and shall  
thereafter be exercisable by Parent upon the same terms and conditions in       
effect immediately prior to the Effective Time, except that the Parent Common   
Stock purchasable pursuant to the Repurchase Options and the purchase price per 
share shall be adjusted to reflect the Exchange Ratio.                          

 SECTION 3.06 Certain Adjustments. If between the date of this Agreement and
the Effective Time, the outstanding Parent Common Stock, Company Common Stock   
or Company Preferred Stock shall be changed into a different number of shares   
by reason of any reclassification, recapitalization, split-up, combination or   
exchange of shares, or any dividend payable in stock or other securities shall  
be declared thereon with a record date within such period, then each Exchange   
Ratio shall be adjusted accordingly to provide to Parent and Company the same   
economic effect as contemplated by this Agreement prior to such                 
reclassification, recapitalization, split-up, combination, exchange or          
dividend.                                                                       

SECTION 3.07 Lost, Stolen or Destroyed Certificates. In the event any     
Company Certificates shall have been lost, stolen or destroyed, the Exchange    
Agent shall issue in exchange for such lost, stolen or destroyed Company        
Certificates, upon the making of an affidavit of that fact by the holder        
thereof, such shares of Parent Common Stock (and cash in lieu of fractional     
shares) as may be required pursuant to Section 3.01, provided, however, that    
Parent may, in its discretion and as a condition precedent to the issuance      
thereof, require the owner of such lost, stolen or destroyed Company            
Certificates to indemnify Parent against any claim that may be made against     
Parent, the Surviving Corporation or the Exchange Agent with respect to the     
Company Certificates alleged to have been lost, stolen or destroyed.            

SECTION 3.08 Taking of Necessary Action; Further Action. If, at any time  
after the Effective Time, any further action is necessary or desirable to carry 
out the purposes of this Agreement and to vest the Surviving Corporation with   
full right, title and possession to all assets, property, rights, privileges,   
powers and                                                                      

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franchises of Surviving Corporation, the officers and directors of Company are  
fully authorized in the name of their corporation or otherwise to take, and     
will use good faith efforts to take, all such lawful and necessary action, so   
long as such action is not inconsistent with this Agreement.                    

ARTICLE IV. 

REPRESENTATIONS AND WARRANTIES OF COMPANY 

The Company hereby represents and warrants to Parent, subject to the      
exceptions specifically disclosed in writing in the Company Disclosure          
Schedule, all such exceptions to be referenced to a specific representation set 
forth in this Article IV, that:                                                 

SECTION 4.01 Organization and Qualification; Subsidiaries.                

 (a) The Company has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the    
requisite corporate power and authority to own, lease and operate its           
properties and to carry on its business as it is now being conducted. The       
Company is duly qualified or licensed to do business, and is in good standing   
(to the extent applicable), in each jurisdiction where the character of the     
properties owned, leased or operated by it or the nature of its business makes  
such qualification or licensing necessary, except for such failures to be so    
qualified or licensed and in good standing that could not reasonably be         
expected to have, individually or in the aggregate, a Company Material Adverse  
Effect.                                                                         

 (b) There are no directly and indirectly owned Subsidiaries of the Company.
Except as set forth in Schedule 4.01 of the Company Disclosure Schedule, the    
Company does not own an equity interest in any partnership or joint venture     
arrangement or other business entity that is material to the business, assets,  
liabilities, financial condition or results of operations of Company.           

SECTION 4.02 Articles of Incorporation and Bylaws. The copies of Company's
articles of incorporation and bylaws previously made available to Parent by     
Company are true, complete and correct copies thereof. Such articles of         
incorporation and bylaws are in full force and effect. The Company is not in    
violation of any of the provisions of its articles of incorporation or bylaws.  

SECTION 4.03 Capitalization. The authorized capital stock of Company      
consists of 60,000,000 shares of Company Common Stock and 36,000,361 shares of  
Company Preferred Stock, of which 1,907,500 have been designated Series A       
Preferred Stock, all of which is issued and outstanding, 7,843,137 have been    
designated Series B Preferred Stock, all of which is issued and outstanding,    
11,826,647 have been designated Series C Preferred Stock, 11,826,346 shares of  
which are issued and outstanding, and 14,423,077 have been designated Series D  
Preferred Stock, all of which is issued and outstanding. As of the date hereof, 
(i) 10,671,044 shares of Company Common Stock are issued and outstanding, all   
of which are validly issued, fully paid and nonassessable, (ii) no shares of    
Company Common Stock are held in the treasury of Company,                       
(iii) 3,100,396 shares of Company Common Stock are reserved for future issuance 
upon exercise of outstanding Company Stock Options and 632,522 shares of        
Company Common Stock are reserved for future grant pursuant to the Company      
Stock Plan, (iv) 88,236 shares of Company Common Stock are reserved for future  
issuance upon exercise of outstanding Company Warrants, (v) up to 1,967,471     
shares of Company Common Stock are reserved for future issuance upon conversion 
of the Convertible Subordinated Promissory Notes and (vi) 36,000,060 shares of  
Company Common Stock are reserved for future issuance upon conversion of        
outstanding Company Preferred Stock. Each issued and outstanding share of       
Company Preferred Stock is validly issued, fully paid and non-assessable.       
Except for shares of Company Common Stock issuable pursuant to the Company      
Stock Plan and as otherwise set forth in herein or in Schedule 4.03 of the      
Company Disclosure Schedule, and the Repurchase Options, there are no options,  
warrants or other rights, agreements, arrangements or commitments of any        
character to which the Company is a party or by which Company is bound relating 
to the issued or unissued capital stock of Company or obligating Company to     
issue or sell any shares of capital stock of, or other equity interests in, the 
Company (the "Company Rights"). All shares of Company Common                    

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Stock subject to issuance as aforesaid, upon issuance prior to the Effective    
Time on the terms and conditions specified in the instruments pursuant to which 
they are issuable, will be duly authorized, validly issued, fully paid and      
nonassessable. Except for the Repurchase Options, there are no outstanding      
contractual obligations of Company to repurchase, redeem or otherwise acquire   
any shares of Company Common Stock or Company Preferred Stock. There are no     
outstanding contractual obligations of Company to provide funds to, or make any 
material investment (in the form of a loan, capital contribution or otherwise)  
in any Person.                                                                  

SECTION 4.04 Authority Relative to this Agreement. The Company has all    
necessary corporate power and authority to execute and deliver this Agreement,  
to perform its obligations hereunder, and, subject to receipt of the Company    
shareholders' approval and the required statutory approvals, to consummate the  
transactions contemplated hereby. The execution and delivery of this Agreement  
by the Company and the consummation by the Company of the transactions          
contemplated hereby have been duly and validly authorized by all necessary      
corporate action, and no other corporate proceedings on the part of the Company 
are necessary to authorize this Agreement or to consummate the transactions     
contemplated hereby (other than, with respect to the Merger, the approval of    
this Agreement by the holders of a majority of the outstanding shares of        
Company Common Stock and the holders of a majority of the outstanding shares of 
Company Preferred Stock entitled to vote with respect thereto at the Company    
Shareholders' Meeting (as defined in Section 7.01), the filing of the           
Certificate of Merger, and the filing and recordation of the Agreement of       
Merger as required by California Law). This Agreement has been duly executed    
and delivered by Company and, assuming the due authorization, execution and     
delivery by the Parent, constitutes the legal, valid and binding obligation of  
Company, enforceable against Company in accordance with its terms, except to    
the extent that enforceability hereof may be limited by applicable bankruptcy,  
insolvency, reorganization or other similar laws affecting the enforcement of   
creditors' rights generally and by principles of equity regarding the           
availability of remedies.                                                       

SECTION 4.05 No Conflict; Required Filings and Consents.                  

(a) The execution and delivery of this Agreement by the Company does not, 
and the performance by Company of its obligations hereunder, and the            
consummation of the Merger will not, (i) conflict with or violate any provision 
of the articles of incorporation or bylaws of Company, (ii) assuming that all   
consents, approvals, authorizations and permits described in Section 4.05(b)    
have been obtained and all filings and notifications described in Section       
4.05(b) have been made, conflict with or violate any Law applicable to Company  
or by which any property or asset of Company is bound or affected or (iii)      
result in any breach of or constitute a default (or an event which with the     
giving of notice or lapse of time or both could reasonably be expected to       
become a default) under, or give to others any right of termination, amendment, 
acceleration or cancellation of, or result in the creation of a lien or other   
encumbrance on any property or asset of Company pursuant to, any material note, 
bond, mortgage, indenture, contract, agreement, lease, license, permit,         
franchise or other instrument or obligation, except in case of clauses (ii) and 
(iii) for such conflicts, violations, breaches, defaults or rights as could not 
reasonably be expected individually or in the aggregate to have a Company       
Material Adverse Effect.                                                        

(b) The execution and delivery of this Agreement by Company does not, and 
the performance by Company of its obligations hereunder and the consummation of 
the Merger will not, require any consent, approval, authorization or permit of, 
or filing by Company with or notification by Company to, any Governmental       
Entity, except pursuant to applicable requirements of the Securities Act, Blue  
Sky Laws, the pre-merger notification requirements of the HSR Act, if any, the  
filing of the Certificate of Merger under the DGCL and the filing and           
recordation of the Agreement of Merger as required by California Law.           

 SECTION 4.06 Permits; Compliance with Laws. Company is in possession of all
franchises, grants, authorizations, licenses, establishment registrations,      
product listings, permits, approvals and orders of any Governmental Entity      
necessary for Company to own, lease and operate its properties and assets or    
otherwise to carry on its business as it is now being conducted, other than     
those, the failure of which to possess, could not reasonably be expected to     
have, individually, or in the aggregate, a Company Material Adverse Effect      
(collectively, the "Company Permits"), and, as of the date of this Agreement,   
none of the Company Permits                                                     

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has been suspended or cancelled nor is any such suspension or cancellation      
pending or, to the Knowledge of Company, threatened in writing. The Company is  
not in conflict with, or in default or violation of, (i) any Law applicable to  
Company or by which any property or asset of Company is bound or affected or    
(ii) any Company Permits, which would prevent the Company from consummating the 
transactions contemplated hereby.                                               

SECTION 4.07 Financial Statements.                                        

(a) Company has delivered to Parent copies of (i) the audited condensed   
balance sheets of the Company at June 30, 2000, together with related audited   
condensed statement of operations, stockholders' equity and cash flows for the  
year ended June 30, 2000 and the notes thereto and (ii) the unaudited condensed 
balance sheets of the Company at December 31, 2000, together with the related   
condensed statements of operations and cash flows for the six-month period      
ended December 31, 2000 and the notes thereto (collectively, the "Company       
Financial Statements"). The Company Financial Statements were prepared in       
accordance with GAAP (subject to normal year end adjustments, which adjustments 
are not material) applied on a consistent basis throughout the periods          
indicated (except as may be indicated in the notes thereto) and each presented  
fairly the financial position of Company as at the respective dates thereof,    
and its results of operations and cash flows for the period indicated therein,  
except as otherwise noted therein (subject to normal and recurring immaterial   
year-end adjustments).                                                          

(b) Except as and to the extent set forth or reserved against on the      
condensed balance sheet of Company as of December 31, 2000, the Company has no  
liabilities or obligations of any nature (whether accrued, absolute, contingent 
or otherwise) that would be required to be reflected on a balance sheet or in   
notes thereto prepared in accordance with GAAP, except for (i) liabilities or   
obligations which individually or in the aggregate could not reasonably be      
expected to have a Company Material Adverse Effect or (ii) liabilities or       
obligations incurred in the ordinary course of business consistent with past    
practice since December 31, 2000.                                               

 SECTION 4.08 Certain Tax Matters. Neither the Company nor, to the Knowledge
of Company, any of its Affiliates has taken or agreed to take any action (other 
than actions contemplated by this Agreement) that could reasonably be expected  
to prevent the Merger from constituting a "reorganization" within the meaning   
of Section 368(a) of the Code. The Company is not aware of any agreement or     
plan to which the Company or any of its Affiliates is a party or other          
circumstances relating to Company or any of its Affiliates that could           
reasonably be expected to prevent the Merger from being so treated as a or from 
so qualifying as a reorganization under Section 368(a) of the Code.             

SECTION 4.09 Litigation. There is no suit, claim, action, proceeding or   
investigation pending or, to the Knowledge of Company, threatened against       
Company that could reasonably be expected to prevent the Company from           
consummating the transactions contemplated hereby. The Company is not aware of  
any facts or circumstances that could reasonably be expected to result in the   
denial of insurance coverage under policies issued to Company in respect of     
such suits, claims, actions, proceedings and investigations, except in any case 
as could not reasonably be expected to have, individually or in the aggregate,  
a Company Material Adverse Effect. The Company is not subject to any            
outstanding order, writ, injunction or decree which could reasonably be         
expected to have, individually or in the aggregate, a Company Material Adverse  
Effect or materially interfere with Company's ability to consummate the         
transactions contemplated hereby.                                               

SECTION 4.10 Affiliates. Schedule 4.10 of the Company Disclosure Schedule 
sets forth the names and addresses of each Person who is, in the Company's      
reasonable judgment, an affiliate (as such term is used in Rule 145 under the   
Securities Act) of the Company.                                                 

SECTION 4.11 Brokers. No broker, finder or investment banker (other than  
Company Financial Advisor) is entitled to any brokerage, finder's or other fee  
or commission in connection with the Merger based upon arrangements made by or  
on behalf of Company.                                                           

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  SECTION 4.12 Information Supplied. None of the information supplied or to be
supplied by Company for inclusion in (a) the Registration Statement on Form S-4 
to be filed with the SEC by Parent in connection with the issuance of shares of 
Parent Common Stock in the Merger (including the joint proxy statement and      
prospectus, together with any amendments thereto (the "Joint Proxy              
Statement/Prospectus"), constituting a part thereof) (the "S-4 Registration     
Statement") will, at the time the S-4 Registration Statement becomes effective  
under the Securities Act, contain any untrue statement of a material fact or    
omit to state any material fact required to be stated therein or necessary to   
make the statements therein, in light of the circumstances under which they are 
made, not misleading, and (b) the Joint Proxy Statement/Prospectus and any      
amendment or supplement thereto will, at the date such information is supplied  
and at the time of the meetings of the Company shareholders and Parent          
stockholders to be held to approve or adopt, as the case may be, this           
Agreement, contains or will contain any untrue statement of a material fact or  
omits or will omit to state any material fact required to be stated therein or  
necessary in order to make the statement therein, in light of the circumstances 
under which they were made, not misleading.                                     

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF PARENT

The Parent hereby represents and warrants to Company, subject to the      
exceptions specifically disclosed in the Parent Disclosure Schedule which shall 
have been provided to the Company at least two days prior to the date of        
execution of this Agreement, all such exceptions to be referenced to a specific 
representation set forth in this Article V, that:                               

SECTION 5.01 Organization and Qualification; Subsidiaries.                

(a) The Parent and each directly and indirectly owned Subsidiary of Parent
(the "Parent Subsidiaries"), has been duly organized and is validly existing    
and in good standing (to the extent applicable) under the laws of the           
jurisdiction of its incorporation or organization, as the case may be, and has  
the requisite corporate power and authority to own, lease and operate its       
properties and to carry on its business as it is now being conducted. The       
Parent and each Parent Subsidiary is duly qualified or licensed to do business, 
and is in good standing (to the extent applicable), in each jurisdiction where  
the character of the properties owned, leased or operated by it or the nature   
of its business makes such qualification or licensing necessary, except for     
such failures to be so qualified or licensed and in good standing that could    
not reasonably be expected to have, individually or in the aggregate, a Parent  
Material Adverse Effect.                                                        

(b) Schedule 5.01 of the Parent Disclosure Schedule sets forth, as of the 
date of this Agreement, a true and complete list of each Parent Subsidiary and  
each entity in which Parent owns a 15% or greater equity interest, together     
with the jurisdiction of incorporation or organization of each Parent           
Subsidiary and the percentage of each Parent Subsidiary's outstanding capital   
stock or other equity interests owned by Parent or another Parent Subsidiary.   
Except as set forth in Schedule 5.01 of the Parent Disclosure Schedule, neither 
the Parent nor any Parent Subsidiary owns an equity interest in any partnership 
or joint venture arrangement or other business entity that is material to the   
business, assets, liabilities, financial condition or results of operations of  
the Parent and the Parent Subsidiaries, taken as a whole.                       

  SECTION 5.02 Certificate of Incorporation and Bylaws. The copies of Parent's
certificate of incorporation and bylaws previously made available to the        
Company by Parent are true, complete and correct copies thereof. Such           
certificate of incorporation and bylaws are in full force and effect. The       
Parent is not in violation of any of the provisions of its certificate of       
incorporation or bylaws. The certificate of incorporation and bylaws of Parent  
contains a provision authorizing Parent to provide indemnification of its       
officers and directors to the fullest extent permitted under Delaware Law.      

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SECTION 5.03 Capitalization.                                              

 (a) The authorized capital stock of Parent consists of 40,000,000 shares of
Parent Common Stock and 2,000,000 shares of preferred stock. As of the date     
hereof (i) 13,083,720 shares of Parent Common Stock are issued and outstanding, 
all of which are validly issued, fully paid and nonassessable, (ii) no shares   
of Parent Common Stock are held in the treasury of Parent, (iii) no shares of   
Parent Common Stock are held by the Parent Subsidiaries, and (iv) 3,014,526     
shares of Parent Common Stock are reserved for future issuance upon exercise of 
outstanding options to purchase shares of Parent Common Stock under the Parent  
Stock Plans and pursuant to option grants which were not made under the Parent  
Stock Plans ("Parent Stock Options"), and 2,602,348 shares of Parent Common     
Stock are reserved for future issuance upon exercise of outstanding warrants to 
purchase shares of Parent Common Stock ("Parent Warrants"). Except for the      
Parent Warrants and Parent Common Stock issuable pursuant to the Parent Stock   
Plans, there are no options, warrants or other rights, agreements, arrangements 
or commitments of any character to which Parent is a party or by which Parent   
is bound relating to the issued or unissued capital stock of Parent or any      
Parent Subsidiary or obligating Parent or any Parent Subsidiary to issue or     
sell any shares of capital stock of, or other equity interests in, Parent or    
any Parent Subsidiary. All Parent Common Stock subject to issuance as           
aforesaid, upon issuance prior to the Effective Time on the terms and           
conditions specified in the instruments pursuant to which they are issuable,    
will be duly authorized, validly issued, fully paid and nonassessable. The      
Parent Common Stock and Parent Warrants issued pursuant to the Common Stock     
Purchase Agreement dated as of February 24, 2000 by and among Parent and        
certain purchasers listed therein, were duly approved for issuance by the vote  
of the Parent stockholders in accordance with the rules of the NNM and          
applicable law. Parent has not received any notices from Nasdaq or the NASD     
stating that Parent Common Stock is subject to potential delisting from the     
NNM. There are no outstanding contractual obligations of Parent or any Parent   
Subsidiary to repurchase, redeem or otherwise acquire any Parent Common Stock   
or any capital stock of any Parent Subsidiary. Schedule 5.03(a) includes a true 
and correct copy of the capitalization table of Parent, which capitalization    
table accurately reflects the fully diluted capitalization of Parent as of the  
date hereof. Each outstanding share of capital stock of each Parent Subsidiary  
is duly authorized, validly issued, fully paid and nonassessable and each such  
share owned by Parent or another Parent Subsidiary is free and clear of all     
security interests, liens, claims, pledges, options, rights of first refusal,   
agreements, limitations on Parent's or such other Parent Subsidiary's voting    
rights, charges and other encumbrances of any nature whatsoever. There are no   
outstanding contractual obligations of Parent or any Parent Subsidiary to       
provide funds to, or make any material investment (in the form of a loan,       
capital contribution or otherwise) in, any Parent Subsidiary or any other       
Person. Except as disclosed in Schedule 5.03(b) of the Parent Disclosure        
Schedule, the consummation of the transactions contemplated by this Agreement   
will not, either by themselves or in conjunction with other possible events     
(including termination of employment or service), result in the acceleration of 
the exercisability of any outstanding Parent Stock Options, or the acceleration 
of the vesting schedules applicable to the shares subject to those options or   
to any unvested shares issued and outstanding under the Parent Stock Plans and  
the applicable restricted stock agreements or any other modification to such    
options or unvested shares. True and complete copies of all agreements and      
instruments relating to Parent Stock Options or issued under the Parent Stock   
Plans have been provided to the Company, and such agreements and instruments    
have not been amended, modified or supplemented, and, except as specifically    
set forth herein, there are no agreements to amend, modify or supplement such   
agreements or instruments in any case from the form provided to the Company.    
Schedule 5.03(c) of the Parent Disclosure Schedule sets forth (i) exercises of  
Parent Stock Options which were granted under the Parent's 1992 and 1994 Stock  
Plans or outside of any Parent Stock Plan and Parent Stock Options granted      
under Parent's 1995 and 1996 Plans prior to registration of shares of Parent    
Common Stock under such Parent Option Plans on a Form S-8 Registration          
Statement and (ii) the applicable exemption from the registration requirements  
of the Securities Act.                                                          

 (b) All of the shares of Parent Common Stock to be issued (i) in connection
with the Merger, when issued in accordance with this Agreement, and (ii) upon   
the conversion of any Company Right, including any Company Stock Option or      
Company Warrant, to purchase shares of Parent Common Stock, when issued upon    
exercise thereof following the Effective Time, will be validly issued, fully    
paid and nonassessable and will not be subject to preemptive rights or similar  
contractual rights granted by Parent. Additionally, all of the shares of        

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Parent Common Stock to be issued (i) in connection with the Merger, when issued 
in accordance with this Agreement, and (ii) upon the conversion of any Company  
Right, including any Company Stock Option or Company Warrant, to purchase       
shares of Parent Common Stock, when issued upon exercise thereof following the  
Effective Time, will be issued in compliance with all applicable state          
securities laws. Furthermore, all of the shares of Parent Common Stock to be    
issued (i) in connection with the Merger, when issued in accordance with this   
Agreement, and (ii) upon the conversion of any Company Right, including any     
Company Stock Option or Company Warrant, to purchase shares of Parent Common    
Stock, when issued upon exercise thereof following the Effective Time, will be  
qualified for listing on the NNM.                                               

 SECTION 5.04 Authority Relative to this Agreement. Parent has all necessary
corporate power and authority to execute and deliver this Agreement and to      
perform its obligations hereunder, and, subject to receipt of Parent            
stockholders' approval and the required statutory approvals, to consummate the  
transactions contemplated hereby. The execution and delivery of this Agreement  
by Parent and the consummation by Parent of the transactions contemplated       
hereby have been duly and validly authorized by all necessary corporate action, 
and no other corporate proceedings on the part of Parent are necessary to       
authorize this Agreement or to consummate the transactions contemplated hereby  
(other than the approval of the Share Issuance (as defined in Section 7.01) by  
the requisite vote of stockholders of Parent at the Parent Stockholders'        
Meeting (as defined in Section 7.01), the filing of the Certificate of Merger   
under the DGCL and the filing and recordation of the Agreement of Merger as     
required by California Law). This Agreement has been duly executed and          
delivered by Parent, and, assuming the due authorization, execution and         
delivery by Company, constitutes a legal, valid and binding obligation of       
Parent enforceable against Parent in accordance with its terms, except to the   
extent that enforceability hereof may be limited by applicable bankruptcy,      
insolvency, reorganization or other similar laws affecting the enforcement of   
creditors' rights generally and by principles of equity regarding the           
availability of remedies.                                                       

SECTION 5.05 No Conflict; Required Filings and Consents.                  

(a) Except as disclosed in Section 5.05 of the Parent Disclosure Schedule,
the execution and delivery of this Agreement by Parent does not, and the        
performance by Parent of its obligations hereunder and the consummation of the  
Merger will not, (i) conflict with or violate any provision of the certificate  
of incorporation or bylaws of Parent or any equivalent organizational documents 
of any Parent Subsidiary, (ii) assuming that all consents, approvals,           
authorizations and permits described in Section 5.05(b) have been obtained and  
all filings and notifications described in Section 5.05(b) have been made,      
conflict with or violate any Law applicable to Parent or any Parent Subsidiary  
or by which any property or asset of Parent or any Parent Subsidiary is bound   
or affected or (iii) result in any breach of or constitute a default (or an     
event which with the giving of notice or lapse of time or both could reasonably 
be expected to become a default) under, or give to others any right of          
termination, amendment, acceleration or cancellation of, or result in the       
creation of a lien or other encumbrance on any property or asset of Parent or   
any Parent Subsidiary pursuant to, any material note, bond, mortgage,           
indenture, contract, agreement, lease, license, permit, franchise or other      
instrument or obligation, except in case of clauses (ii) and (iii) for such     
conflicts, violations, breaches, defaults or rights as could not reasonably be  
expected individually or in the aggregate to have a Parent Material Adverse     
Effect.                                                                         

  (b) The execution and delivery of this Agreement by Parent does not, and the
performance by Parent of its obligations hereunder, and the consummation of the 
Merger will not, require any consent, approval, authorization or permit of, or  
filing by Parent with or notification by Parent to, any Governmental Entity,    
except pursuant to applicable requirements of the Exchange Act, the Securities  
Act, Blue Sky Laws, the rules and regulations of the NNM, the pre-merger        
notification requirements of the HSR Act, if any, the filing of the Certificate 
of Merger under the DGCL and the filing and recordation of the Agreement of     
Merger as required by California Law.                                           

SECTION 5.06 Permits; Compliance with Laws. Parent and each of the Parent 
Subsidiaries are in possession of all franchises, grants, authorizations,       
licenses, establishment registrations, product listings, permits, approvals and 
orders of any Governmental Entity necessary for Parent or any Parent Subsidiary 
to                                                                              

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own, lease and operate its properties and assets or otherwise to carry on its   
business as it is now being conducted, other than those, the failure of which   
to possess, could not reasonably be expected to have, individually, or in the   
aggregate, a Parent Material Adverse Effect (collectively, the "Parent          
Permits"), and, as of the date of this Agreement, none of the Parent Permits    
has been suspended or cancelled nor is any such suspension or cancellation      
pending or, to the Knowledge of Parent, threatened in writing. Neither Parent   
nor any Parent Subsidiary is in conflict with, or in default or violation of,   
(i) any Law applicable to Parent or any Parent Subsidiary or by which any       
property or asset of Parent or any Parent Subsidiary is bound or affected or    
(ii) any Parent Permits, except for such conflicts, defaults or violations that 
could not reasonably be expected to have, individually or in the aggregate, a   
Parent Material Adverse Effect. Schedule 5.06 of the Parent Disclosure Schedule 
sets forth, as of the date of this Agreement, all actions, proceedings,         
investigations or surveys pending or, to the Knowledge of Parent, threatened in 
writing against Parent or any Parent Subsidiary that could reasonably be        
expected to result in the suspension or cancellation of any Parent Permit.      
Since January 1, 2001, neither Parent nor any Parent Subsidiary has received    
from any Governmental Entity any written notification with respect to possible  
conflicts, defaults or violations of Laws.                                      

SECTION 5.07 SEC Filings; Financial Statements.                           

(a) Parent has filed all forms, reports, statements and documents required
to be filed by it with the SEC and the NNM since January 31, 1995               
(collectively, together with any such forms, reports, statements and documents  
(including exhibits thereto) Parent may file or furnish subsequent to the date  
hereof until the Closing, the "Parent Reports"). Each Parent Report (i) was     
prepared in accordance with the requirements of the Securities Act, the         
Exchange Act or the NNM, as the case may be, and (ii) did not at the time it    
was filed contain any untrue statement of a material fact or omit to state a    
material fact required to be stated therein or necessary in order to make the   
statements made therein, in the light of the circumstances under which they     
were made, not misleading. Parent will file its Annual Report on Form 10-K with 
the SEC in a timely manner in accordance with the requirements of the Exchange  
Act. No Parent Subsidiary is subject to the periodic reporting requirements of  
the Exchange Act or required to file any form, report or other document with    
the SEC, the NNM, any other stock exchange or any other comparable Governmental 
Entity.                                                                         

 (b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Parent Reports was prepared in accordance   
with GAAP (except, in the case of unaudited financial statements, for the       
absence of footnotes and subject to normal year end adjustments, which          
adjustments are not material) applied on a consistent basis throughout the      
periods indicated (except as may be indicated in the notes thereto) and each    
presents fairly the consolidated financial position of Parent and the Parent    
Subsidiaries as at the respective dates thereof, and their consolidated results 
of operations, stockholders' equity and cash flows for the respective periods   
indicated therein, except as otherwise noted therein (subject, in the case of   
unaudited statements, to normal and recurring immaterial year-end adjustments). 

(c) Except as and to the extent set forth or reserved against on the      
consolidated balance sheet of Parent and the Parent Subsidiaries as of December 
31, 2000 as reported in the Parent Reports, neither Parent nor any Parent       
Subsidiary has any liabilities or obligations of any nature (whether accrued,   
absolute, contingent, matured, unmatured or otherwise) that would be required   
to be reflected on a balance sheet or in notes thereto prepared in accordance   
with GAAP, and neither Parent nor any Parent Subsidiary knows of any basis for  
such liabilities, except for (i) liabilities or obligations which individually  
or in the aggregate could not be reasonably expected to have a Parent Material  
Adverse Effect, or (ii) liabilities or obligations incurred in the ordinary     
course of business consistent with past practice since December 31, 2000.       

(d) Section 5.07 of the Parent Disclosure Schedule includes copies of the 
unaudited consolidated balance sheets of the Parent and the Parent Subsidiaries 
at December 31, 2000, together with related unaudited consolidated statement of 
operations, stockholders' equity and cash flows for the year ended December 31, 
2000 and the notes thereto (the "Parent Financial Statements"). The Parent      
Financial Statements were prepared in accordance with GAAP applied on a         
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indicated in the notes thereto), are accurate in all material respects and each 
presents fairly the consolidated financial position of Parent and the Parent    
Subsidiaries as at the respective dates thereof, and their consolidated results 
of operations, stockholders' equity and cash flows for the respective periods   
indicated therein, except as otherwise noted therein (subject to immaterial     
year-end adjustments). The Audited Parent Financial Statements (as defined in   
Section 6.07(a) below) will not contain any material changes from the Parent    
Financial Statements.                                                           

SECTION 5.08 Certain Tax Matters. Neither Parent nor, to the Knowledge of 
Parent, any of its Affiliates has taken or agreed to take any action (other     
than actions contemplated by this Agreement) that could reasonably be expected  
to prevent the Merger from constituting a "reorganization" within the meaning   
of Section 368(a) of the Code. Parent is not aware of any agreement or plan to  
which Parent or any of its Affiliates is a party or other circumstances         
relating to Parent or any of its Affiliates that could reasonably be expected   
to prevent the Merger from so qualifying as a reorganization under Section      
368(a) of the Code.                                                             

 SECTION 5.09 Litigation. Except as disclosed in Schedule 5.09 of the Parent
Disclosure Schedule, there is no suit, claim, action, proceeding or             
investigation pending or, to the Knowledge of Parent, threatened against Parent 
or any Parent Subsidiary that could reasonably be expected to have,             
individually or in the aggregate, a Parent Material Adverse Effect or           
materially interfere with Parent's ability to consummate the transactions       
contemplated herein, and, to the Knowledge of Parent, there are no existing     
facts or circumstances that could reasonably be expected to result in such a    
suit, claim, action, proceeding or investigation. Parent is not aware of any    
facts or circumstances which could reasonably be expected to result in the      
denial of insurance coverage under policies issued to Parent and Parent         
Subsidiaries in respect of such suits, claims, actions, proceedings and         
investigations, except in any case as could not reasonably be expected to have, 
individually or in the aggregate, a Parent Material Adverse Effect. Neither     
Parent nor any Parent Subsidiary is subject to any outstanding order, writ,     
injunction or decree which could reasonably be expected to have, individually   
or in the aggregate, a Parent Material Adverse Effect or materially interfere   
with Parent's ability to consummate the transactions contemplated herein.       

SECTION 5.10 Absence of Certain Changes or Events. Except as otherwise set
forth on Schedule 5.10 of the Parent Disclosure Schedule, since December 31,    
2000, Parent and the Parent Subsidiaries have conducted their businesses only   
in the ordinary course consistent with past practice and, since such date,      
there has not been (i) any Parent Material Adverse Effect, (ii) any event that  
could reasonably be expected to prevent or materially delay the performance of  
Parent's obligations pursuant to this Agreement and the consummation of the     
Merger, (iii) any material change by Parent in its accounting methods,          
principles or practices, (iv) any declaration, setting aside or payment of any  
dividend or distribution in respect of the Parent Common Stock or any           
redemption, purchase or other acquisition of any of Parent's securities, (v)    
except in the ordinary course of business consistent with past practice, any    
increase in the compensation or benefits or establishment of any bonus,         
insurance, severance, deferred compensation, pension, retirement, profit        
sharing, stock option (including, without limitation, the granting of stock     
options, stock appreciation rights, performance awards or restricted stock      
awards), stock purchase or other employee benefit plan, or any other increase   
in the compensation payable or to become payable to any executive officers of   
Parent or any Parent Subsidiary, (vi) any issuance or sale of any stock, notes, 
bonds or other securities other than pursuant to the exercise of outstanding    
securities, or entering into any agreement with respect thereto, (vii) any      
amendment to the Parent's certificate of incorporation or bylaws, (viii) other  
than in the ordinary course of business, any (x) purchase, sale, assignment or  
transfer of any material assets, (y) mortgage, pledge or the institution of any 
lien, encumbrance or charge on any material assets or properties, tangible or   
intangible, except for liens for taxes not yet delinquent and such other liens, 
encumbrances or charges which do not, individually or in the aggregate, have a  
Parent Material Adverse Effect, or (z) waiver of any rights of material value   
or cancellation or any material debts or claims, (ix) any incurrence of any     
material liability (absolute or contingent), except for current liabilities and 
obligations incurred in the ordinary course of business consistent with past    
practice, (x) any incurrence of any damage, destruction or similar loss,        
whether or not covered by insurance, materially affecting the business or       
properties of Parent or any Parent Subsidiary, or (xi) any entering into any    
transaction of a material nature, or                                            

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any agreement to enter into any such transaction (except the Merger), other     
than in the ordinary course of business, consistent with past practices.        

SECTION 5.11 Employee Benefit Plans.                                      

(a) With respect to each employee benefit fund, plan, program, arrangement
and contract (including, without limitation, any "employee benefit plan," as    
defined in Section 3(3) of ERISA) maintained, sponsored or contributed to or    
required to be contributed to by Parent or any Parent Subsidiary or other trade 
or business (whether or not incorporated) treated as a single employer with     
Parent (a "Parent ERISA Affiliate") pursuant to Code Section 414(b), (c), (m)   
or (o) is a party, or with respect to which Parent or any Parent ERISA          
Affiliate could incur liability under Section 4069, 4212(c) or 4204 of ERISA or 
Section 412 of the Code (the "Parent Benefit Plans"), Parent has made available 
to Company a true, complete and correct copy of (i) such Parent Benefit Plan    
and the most recent summary plan description related to such Parent Benefit     
Plan, if a summary plan description is required therefor, (ii) each trust       
agreement or other funding arrangement relating to such Parent Benefit Plan,    
(iii) the most recent annual report (Form 5500) filed with the IRS) with        
respect to such Parent Benefit Plan, (iv) the most recent actuarial report or   
financial statement relating to such Parent Benefit Plan and (v) the most       
recent determination letter issued by the IRS with respect to such Parent       
Benefit Plan, if it is qualified under Section 401(a) of the Code. Neither      
Parent nor any Parent Affiliate has any express or implied commitment, whether  
legally enforceable or not, to modify, change or terminate any Parent Benefit   
Plan, other than with respect to a modification, change or termination required 
by ERISA or the Code.                                                           

(b) Each Parent Benefit Plan has been administered in accordance with its 
terms and all applicable laws, including, without limitation, ERISA and the     
Code, and all contributions required to be made under the terms of any of the   
Parent Benefit Plans as of the date of this Agreement have been timely made or  
have been reflected on the most recent consolidated balance sheet filed or      
incorporated by reference in the Parent Reports filed prior to the date of this 
Agreement. With respect to the Parent Benefit Plans, no event has occurred and, 
to the Knowledge of Parent, there exists no condition or set of circumstances   
in connection with which Parent or any Parent ERISA Affiliate could be subject  
to any liability (other than for routine benefit liabilities) under the terms   
of such Parent Benefit Plans, ERISA, the Code or any other applicable Law.      

 (c) Except as disclosed in Schedule 5.11 of the Parent Disclosure Schedule,
(i) each Parent Benefit Plan which is intended to be qualified under Section    
401(a) of the Code or Section 401(k) of the Code has received or is currently   
awaiting receipt of a favorable determination letter from the IRS as to its     
qualified status under the Code, and each trust established in connection with  
any Parent which is intended to be exempt from federal income taxation under    
Section 501(a) of the Code has received a determination letter from the IRS     
that it is so exempt, and no fact or event has occurred since the date of such  
determination letter from the IRS to adversely affect the qualified status of   
any such Parent Benefit Plan or the exempt status of any such trust; (ii) there 
has been no prohibited transaction (within the meaning of Section 406 of ERISA  
or Section 4975 of the Code) with respect to any Parent Benefit Plan; (iii)     
each Parent Benefit Plan can be amended, terminated or otherwise discontinued   
after the Effective Time in accordance with its terms, without liability, other 
than (A) liability for ordinary administrative expenses typically incurred in a 
termination event or (B) if the Parent Benefit Plan is a pension benefit plan   
subject to Part 2 of Title I of ERISA, liability for the accrued benefits as of 
the date of such termination (if and to the extent required by ERISA) to the    
extent that either (x) there are sufficient assets set aside in a trust or      
insurance contract to satisfy such liability or (y) such liability is reflected 
on the most recent consolidated balance sheet included in the Parent Reports    
filed prior to the date of this Agreement. No suit, administrative proceeding,  
action or other litigation has been brought, or to the Knowledge of Parent is   
threatened, against or with respect to any such Parent Benefit Plan, including  
any audit or inquiry by the IRS or United States Department of Labor (other     
than routine benefits claims).                                                  

(d) No Parent Benefit Plan is a multi-employer pension plan (as defined in
Section 3(37) of ERISA) or other pension plan subject to Title IV of ERISA and  
neither the Parent nor any Parent ERISA Affiliate has sponsored or contributed  
to or been required to contribute to a multi-employer pension plan or other     
pension plan subject to Title IV of ERISA. No liability under Title IV of ERISA 
has been incurred by Parent or any                                              

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Parent ERISA Affiliate that has not been satisfied in full, and no condition    
exists that presents a material risk to Parent or any Parent ERISA Affiliate of 
incurring or being subject (whether primarily, jointly or secondarily) to a     
material liability thereunder. None of the assets of Parent or any Parent ERISA 
Affiliate is, or may reasonably be expected to become, the subject of any lien  
arising under ERISA or Section 412(n) of the Code.                              

 (e) With respect to each Parent Benefit Plan that is subject to Title IV or
Part 3 of Title I of ERISA or Section 412 of the Code, (i) no reportable event  
(within the meaning of Section 4043 of ERISA, other than an event that is not   
required to be reported before or within thirty days of such event) has         
occurred or is expected to occur, (ii) there was not an accumulated funding     
deficiency (within the meaning of Section 302 of ERISA or Section 412 of the    
Code), whether or not waived, as of the most recently ended plan year of such   
Parent Benefit Plan; and (iii) there is no "unfunded benefit liability" (within 
the meaning of Section 4001(a)(18) of ERISA).                                   

(f) Parent has set forth on Schedule 5.11(f) of the Parent Disclosure     
Schedule and has delivered to Company true, complete and correct copies of (i)  
all employment agreements with officers and all consulting and other advisory   
agreements of Parent and each Parent Subsidiary providing for annual            
compensation in excess of $100,000, (ii) all severance plans, agreements,       
programs and policies of Parent and each Parent Subsidiary with or relating to  
their respective employees, directors, advisory committee members or            
consultants, and (iii) all plans, programs, agreements and other arrangements   
of Parent and each Parent Subsidiary with or relating to their respective       
employees, directors or consultants which contain "change of control"           
provisions. No payment or benefit which will be made by Parent or any Parent    
Subsidiary under any Parent Benefit Plan or other arrangement will constitute   
an excess parachute payment under Code Section 280G(b)(1), and, except as       
disclosed in Schedule 5.11(f) of the Parent Disclosure Schedule, the            
consummation of the transactions contemplated by this Agreement will not        
individually or in conjunction with any other possible event (including         
termination of employment) (i) entitle any current or former employee or other  
service provider of Parent or any Parent Subsidiary to severance benefits or    
any other payment, compensation or benefit (including forgiveness of            
indebtedness), except as expressly provided by this Agreement, or               
(ii) accelerate the time of payment or vesting, or increase the amount of       
compensation or benefit due any such employee or service provider.              

Except as required by Law, no Parent Benefit Plan provides any of the     
following retiree or post-employment benefits to any Person: medical,           
disability or life insurance benefits. To the Knowledge of Parent, Parent and   
the Parent ERISA Affiliates are in material compliance with (i) the             
requirements of the applicable health care continuation and notice provisions   
of COBRA and the regulations (including proposed regulations) thereunder and    
(ii) the applicable requirements of the Health Insurance Portability and        
Accountability Act of 1996 and the regulations (including the proposed          
regulations) thereunder.                                                        

SECTION 5.12 Employment and Labor Matters.                                

(a) Neither Parent nor any Parent Subsidiary is a party to any collective 
bargaining or other labor union contract applicable to Persons employed by      
Parent or any Parent Subsidiary, no collective bargaining agreement is being    
negotiated by Parent or any Parent Subsidiary and Parent and Parent             
Subsidiaries have no duty to bargain with any labor organization with respect   
to any such persons. There is no pending demand for recognition or any other    
request or demand from a labor organization for representative status with      
respect to any persons employed by Parent and Parent Subsidiaries. As of the    
date of this Agreement, there is no labor dispute, strike or work stoppage      
against Parent or any Parent Subsidiary pending or, to the Knowledge of Parent, 
threatened which may interfere with the respective business activities of       
Parent or any Parent Subsidiary. As of the date of this Agreement, neither      
Parent nor any Parent Subsidiary, or, to the Knowledge of Parent, any of their  
respective representatives or employees, has committed any unfair labor         
practice in connection with the operation of the respective businesses of       
Parent or any Parent Subsidiary, and there is no charge or complaint against    
Parent or any Parent Subsidiary by the National Labor Relations Board or any    
comparable Governmental Entity pending or threatened.                           

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(b) Parent and Parent Subsidiaries have complied, in all material respects
with the National Labor Relations Act, Title VII of the Civil Rights Act of     
1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act,   
the Securities Act of 1933, as amended (the "Securities Act"), and all other    
Laws pertaining to Parent and Parent Subsidiaries relations with its employees. 
Parent and Parent Subsidiaries have no liability for any arrearages of wages.   
Except as disclosed in Schedule 5.12(b) of the Parent Disclosure Schedule,      
Parent and Parent Subsidiaries have no pending unfair labor practice charges,   
contract grievances under any collective bargaining agreement, other            
administrative charges, claims, grievances or lawsuits before any court,        
governmental agency, regulatory body, or arbiter arising under any Law          
governing any Plan, and, to the Knowledge of Parent and Parent Subsidiaries ,   
there exist no facts that could reasonably be expected to give rise to such a   
claim.                                                                          

 (c) Parent and Parent Subsidiaries have made available to Company a list of
the names, positions and rates of compensation of all officers, directors,      
employees and consultants of Parent and Parent Subsidiaries, as of the date     
hereof, showing each such person's name, positions, and annual remuneration,    
bonuses and fringe benefits for the current fiscal year and the most recently   
completed fiscal year. With respect to any persons employed by Parent and       
Parent Subsidiaries, Parent and Parent Subsidiaries are in material compliance  
with all Laws respecting employment conditions and practices, have withheld all 
amounts required by any applicable Laws to be withheld from wages or any taxes  
or penalties for failure to comply with any of the foregoing.                   

  (d) With respect to any persons employed by Parent and Parent Subsidiaries ,
(i) Parent and Parent Subsidiaries have not violated any legal requirement      
prohibiting discrimination on the basis of race, color, national origin, sex,   
religion, age, marital status, or handicap in its employment conditions or      
practices; and (ii) except as disclosed in Schedule 5.12(d) of the Parent       
Disclosure Schedule, there are no pending or, to the Knowledge of Parent and    
Parent Subsidiaries, threatened discrimination complaints relating to race,     
color, national origin, sex, religion, age, marital status, or handicap against 
Parent and Parent Subsidiaries before any Government Entity nor, to the         
Knowledge of Parent and Parent Subsidiaries, does any basis therefor exist.     

 (e) Parent and Parent Subsidiaries have complied, in all material respects,
with all Laws governing the employment of personnel by U.S. companies and the   
employment of non-U.S. nationals in the United States, including, but not       
limited to, the Immigration and Nationality Act 8 U.S.C. Sections 1101 et seq.  
and its implementing regulations.                                               

  SECTION 5.13 Contracts. Except for the contracts and agreements described in
Schedule 5.13 of the Parent Disclosure Schedule (collectively, the "Parent      
Material Contracts"), neither Parent nor the Parent Subsidiaries is a party to  
or bound by any material contract, including without limitation, the following  
contracts (which for purposes of this Agreement shall be deemed Parent Material 
Contracts):                                                                     

(a) any material distributor, sales, advertising, agency or           
manufacturer's representative contract;                                     

(b) any continuing contract for the purchase of materials, supplies,  
equipment or services involving in the case of any such contact more than   
$300,000 per annum;                                                         

(c) any contract that expires or may be renewed at the option of any  
Person other than the Parent so as to expire more than one year after the   
date of this Agreement;                                                     

(d) any trust indenture, mortgage, promissory note, loan agreement or 
other contract for the borrowing of money, any currency exchange,           
commodities or other hedging arrangement or any leasing transaction of the  
type required to be capitalized in accordance with GAAP;                    

(e) any contract for capital expenditures in excess of $300,000 in the
aggregate;                                                                  

(f) any contract limiting the freedom of the Parent or any Parent     
Subsidiary to engage in any line of business or to compete with any other   
Person, or any material confidentiality, secrecy or non-disclosure contract 
or confidentiality, secrecy or non-disclosure contract entered into other   
than in the ordinary course of business consistent with past practice;      

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(g) any contract pursuant to which the Parent or any Parent Subsidiary
is a lessor or lessee of any machinery, equipment, motor vehicles, office   
furniture, fixtures or other personal property involving in the case of any 
such contract more than $300,000 per annum;                                 

(h) any contract with any Person with whom the Parent or any Parent   
Subsidiary does not deal at arm's length within the meaning of the Code; or 

 (i) any agreement of guarantee, support, indemnification, assumption or
endorsement of, or any similar commitment with respect to, the obligations, 
liabilities (whether accrued, absolute, contingent or otherwise) or         
indebtedness of any other Person.                                           

Parent and each Parent Subsidiary has performed all of the material       
obligations required to be performed by it and is entitled to all material      
benefits under, and to the Knowledge of Parent, is not alleged to be in default 
in respect of any Parent Material Contract. Each of the Parent Material         
Contracts is in full force and effect, unamended, and there exists no default   
or event of default or event, occurrence, condition or act, with respect to     
Parent or any Parent Subsidiary or to the Knowledge of Parent with respect to   
the other contracting party, which, with the giving of notice or the lapse of   
time would become a default or event of default under any Parent Material       
Contract. True, correct and complete copies of all Parent Material Contracts    
have been delivered or made available to Company.                               

SECTION 5.14 Business Relationships. Neither Parent nor any Parent        
Subsidiary believes, or is aware of any circumstances that could reasonably     
lead them to believe that the Merger may have an adverse impact on any          
arrangements or relationships with customers, suppliers, distributors or        
corporate partners.                                                             

SECTION 5.15 Environmental Matters. Except as could not reasonably be     
expected to have, individually or in the aggregate, a Parent Material Adverse   
Effect, (i) Parent and the Parent Subsidiaries are in compliance with all       
applicable Environmental Laws and all Parent Permits required by Environmental  
Laws; (ii) all past noncompliance of Parent or any Parent Subsidiary with       
Environmental Laws or Environmental Permits has been resolved without any       
pending, ongoing or future obligation, cost or liability; and (iii) neither     
Parent nor any Parent Subsidiary has released a Hazardous Material at, or       
transported a Hazardous Material to or from, any real property currently or     
formerly owned, leased or occupied by Parent or any Parent Subsidiary, in       
violation of any Environmental Law.                                             

SECTION 5.16 Intellectual Property.                                       

(a) Section 5.16(a) of the Parent Disclosure Schedule contains an accurate
and complete list of all patents and patent applications, trademarks, service   
marks, Internet domain names and applications therefor, and copyrights and      
copyright applications, which are part of the Parent Intellectual Property and  
which have been issued or registered by, or filed with, any United States,      
foreign or international governmental or other body having authority to issue,  
register or review the same, including all patent applications that the Parent  
intends to file prior to the Effective Time.                                    

  (b) Except as provided in Section 5.16(b) of the Parent Disclosure Schedule,
the Parent Intellectual Property is: (i) owned solely and exclusively by Parent 
or a Parent Subsidiary, free and clear of any and all mortgages, pledges,       
liens, security interests, conditional sale agreements or encumbrances, of any  
kind; or (ii) rightfully used or otherwise enjoyed by Parent or its             
Subsidiaries pursuant to one or more license agreements, each of which such     
license agreements are, to the Knowledge of Parent and each Parent Subsidiary,  
valid and enforceable.                                                          

(c) Except as disclosed in Schedule 5.16(c) of the Parent Disclosure      
Schedule, no action is currently pending which asserts that Parent or any       
Parent Subsidiary is infringing any Intellectual Property of any Person, and    
neither Parent nor any Parent Subsidiary has received notice from any Person    
within the past twenty four months asserting that Parent or any Parent          
Subsidiary is infringing any Intellectual Property of any such Person. No       
action is currently pending which asserts that any Person is infringing any     
Parent Intellectual                                                             

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Property, and neither Parent nor any Parent Subsidiary has asserted any claim   
of such infringement against any Person within the past twenty four months.     

 (d) Parent and its Subsidiaries have secured valid written assignments from
all consultants and employees who contributed to the creation or development of 
Parent Intellectual Property of the rights to such contributions that Parent    
and its Subsidiaries do not already own by operation of law.                    

(e) Parent and its Subsidiaries have taken all necessary and appropriate  
steps to protect and preserve the confidentiality of all Parent Intellectual    
Property ("Confidential Information"). All use, disclosure or appropriation of  
Confidential Information owned by Parent or any of its Subsidiaries by or to a  
third party has been pursuant to the terms of a written agreement between       
Parent or the applicable Subsidiary and such third party. All use, disclosure   
or appropriation of Confidential Information not owned by Parent or its         
Subsidiaries has been pursuant to the terms of a written agreement between      
Parent and its Subsidiaries and the owner of such Confidential Information, or  
is otherwise lawful.                                                            

SECTION 5.17 Taxes.                                                       

(a) Parent and each of the Parent Subsidiaries, and any consolidated,     
combined, unitary or aggregate group for Tax purposes of which Parent or any    
Parent Subsidiary is or has been a member, have properly completed and timely   
filed all Tax Returns required to be filed by them and have paid all Taxes      
shown thereon to be due. Parent has provided adequate accruals in accordance    
with GAAP in its December 31, 2000 balance sheet contained in the Parent        
Financial Statements (the "Parent December 2000 Balance Sheet") for any Taxes   
that as of December 31, 2000 have not been paid, whether or not shown as being  
due on any Tax Returns. Parent and the Parent Subsidiaries have no material     
liability for unpaid Taxes accruing after December 31, 2000 except for Taxes    
incurred in the ordinary course of business subsequent to December 31, 2000.    

(b) There is (i) no material claim for Taxes that is secured by a lien    
against the property of Parent or any Parent Subsidiary or is being asserted    
against Parent or any Parent Subsidiary other than liens for Taxes not yet due  
and payable, (ii) no audit of any Tax Return of Parent or any Parent Subsidiary 
being conducted by a Tax Authority; (iii) no extension of the statute of        
limitations on the assessment of any Taxes granted by Parent or any Parent      
Subsidiary and currently in effect, and (iv) no agreement, contract or          
arrangement to which Parent or any Parent Subsidiary is a party that may result 
in the payment of any amount that would not be deductible by reason of Section  
280G or 404 of the Code.                                                        

  (c) There has been no change in ownership of Parent or any Parent Subsidiary
that has caused the utilization of any losses of such entities to be limited    
pursuant to Section 382 of the Code, and any loss carryovers reflected on the   
Parent December 2000 Balance Sheet are properly computed and reflected.         

(d) Parent and the Parent Subsidiaries have not been and will not be      
required to include any material adjustment in taxable income for Tax period    
(or portion thereof) pursuant to Section 481 or 263A of the Code or any         
comparable provision under state or foreign Tax laws as a result of             
transactions, events or accounting methods employed prior to the Merger.        

(e) Neither Parent nor any Parent Subsidiary has filed or will file any   
consent to have the provisions of Section 341(f)(2) of the Code (or comparable  
provisions of any state Tax laws) apply to Parent or any Parent Subsidiary.     

(f) Neither Parent nor any Parent Subsidiary is a party to any Tax sharing
or Tax allocation agreement nor does Parent or any Parent Subsidiary have any   
liability or potential liability to another party under any such agreement.     

(g) Parent and each Parent Subsidiary is in full compliance with all terms
and conditions of any Tax exemptions or other Tax-sparing agreement or order of 
a foreign government and the consummation of the Merger shall not have any      
adverse effect on the continued validity and effectiveness of any such Tax      
exemptions or other Tax-sparing agreement or order.                             

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  (h) Neither Parent nor any Parent Subsidiary has filed any disclosures under
Section 6662 or comparable provisions of state, local or foreign law to prevent 
the imposition of penalties with respect to any Tax reporting position taken on 
any Tax Return.                                                                 

(i) Except as disclosed in Schedule 5.17(i) of the Parent Disclosure      
Schedule, neither Parent nor any Parent Subsidiary has ever been a member of a  
consolidated, combined or unitary group of which Parent was not the ultimate    
parent corporation.                                                             

(j) Parent and each Parent Subsidiary has in its possession returns and/or
receipts with respect to Taxes paid to foreign Tax authorities. Neither Parent  
nor any Parent Subsidiary has ever been a "personal holding company" within the 
meaning of Section 542 of the Code or a "United States real property holding    
corporation" within the meaning of Section 897 of the Code.                     

SECTION 5.18 Insurance. Parent and each Parent Subsidiary is presently    
insured, and during each of the past three calendar years has been insured,     
against such risks as companies engaged in a similar business would, in         
accordance with good business practice, customarily be insured. The policies of 
fire, theft, liability and other insurance maintained with respect to the       
assets or businesses of Parent and Parent Subsidiaries provide, in the good     
faith judgment of the Parent's management, reasonably adequate coverage against 
loss. Parent has made available to the Company a complete and correct list as   
of the date hereof of all insurance policies maintained by the Parent or the    
Parent Subsidiaries, and has made available to the Company complete and correct 
copies of all such policies, together with all riders and amendments thereto.   
All such policies are in full force and effect and all premiums due thereon     
have been paid to the date hereof. Parent and the Parent Subsidiaries have      
complied in all material respects with the terms of such policies.              

SECTION 5.19 Properties. The Parent and the Parent Subsidiaries have good 
and valid title, free and clear of all Encumbrances, except for Permitted       
Encumbrances, to all their material properties and assets, whether tangible or  
intangible, real, personal or mixed, reflected in the Parent's consolidated     
financial statements for the period ended December 31, 2000 as being owned by   
Parent and the Parent Subsidiaries as of the date thereof, other than (i) any   
properties or assets that have been sold or otherwise disposed of in the        
ordinary course of business since the date of such financial statements, (ii)   
liens disclosed in the notes to such financial statements and (iii) liens       
arising in the ordinary course of business after the date of such financial     
statements. All buildings, and all fixtures, equipment and other property and   
assets that are material to its business on a consolidated basis, held under    
leases or sub-leases by Parent or any Parent Subsidiary are held under valid    
instruments enforceable in accordance with their respective terms, subject to   
applicable laws of bankruptcy, insolvency or similar laws relating to           
creditors' rights generally and by principles of equity regarding the           
availability of remedies. Substantially all of Parent's and the Parent          
Subsidiaries' equipment in regular use has been reasonably maintained and is in 
serviceable condition, reasonable wear and tear excepted.                       

SECTION 5.20 Employees. A list of all officers, key employees and key     
consultants of Parent and the Parent Subsidiaries and the current compensation  
and benefits of such persons as of the date of this Agreement is set forth in   
Schedule 5.20 of the Parent Disclosure Schedule. Except as contemplated by this 
Agreement, to the Knowledge of Parent, none of Parent's key sales or            
engineering staff (each of whom is identified in Schedule 5.20) currently       
intends to leave Parent's or any Parent Subsidiary's employ.                    

 SECTION 5.21 Parent Rights Plan. Neither the execution and delivery of this
Agreement or any of the agreements contemplated hereby by the parties hereto    
and thereto nor the consummation of the transactions contemplated hereby and    
thereby will cause Company or any of its affiliates or associates to be within  
the definition of an "Acquiring Person" (as defined in the Rights Plan dated as 
of October 9, 1998 (the "Parent Rights Plan")) for purposes of the Parent       
Rights Plan, or Parent shall have taken, prior to the Effective time, any and   
all action necessary or appropriate to insure that a Distribution Date does not 
occur as a result of execution or performance of this Agreement, any of the     
agreements contemplated hereby, or as a result of consummation of any of the    
transactions contemplated hereby or thereby.                                    

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SECTION 5.22 Certain Business Practices. Neither Parent nor any Parent    
Subsidiary nor any directors, officers, agents or employees of Parent or any    
Parent Subsidiary (in their capacities as such) has (i) used any funds for      
unlawful contributions, gifts, entertainment or other unlawful expenses         
relating to political activity or (ii) made any unlawful payment to foreign or  
domestic government officials or employees or to foreign or domestic political  
parties or campaigns or violated any provision of the Foreign Corrupt Practices 
Act of 1977, as amended.                                                        

SECTION 5.23 Books and Records. True and complete copies of all documents 
listed in the Parent Disclosure Schedule have been provided to the Company. The 
books of account, stock record books and other financial and corporate records  
of Parent, all of which have been provided to the Company, are materially       
complete and correct and have been maintained in accordance with good business  
practices, including the maintenance of an adequate system of internal          
accounting controls, and such book and records are accurately reflected in the  
Parent Reports and the financial statement contained in the Parent Reports. The 
minute books of Parent contain accurate and complete records of all meetings    
held of, and corporate action by, the stockholders and the board of directors   
and (and committees thereof) of Parent, and no meeting of any such stockholders 
or board of directors (or committees thereof) has been held for which minutes   
have not been prepared and are not contained in such minute books.              

 SECTION 5.24 Opinion of Financial Advisor. Needham & Company, Inc. ("Parent
Financial Advisor") has delivered to the board of directors of Parent its       
opinion to the effect that the Exchange Ratio is fair to Parent from a          
financial point of view.                                                        

SECTION 5.25 Affiliates. Schedule 5.25 of the Parent Disclosure Schedule  
sets forth the names and addresses of each Person who is, in Parent's           
reasonable judgment, an affiliate (as such term is used in Rule 145 under the   
Securities Act) of Parent.                                                      

SECTION 5.26 Brokers.                                                     

 (a) Except as disclosed in Schedule 5.26 of the Parent Disclosure Schedule,
no broker, finder or investment banker (other than Parent Financial Advisor )   
is entitled to any brokerage, finder's or other fee or commission in connection 
with the Merger based upon arrangements made by or on behalf of Parent.         

(b) Attached hereto as Schedule 5.26(b) of the Parent Disclosure Schedule 
are true, complete and correct copies of all agreements between Parent and the  
Parent Financial Advisor. Other than as attached hereto as Schedule 5.26(b) of  
the Parent Disclosure Schedule, there are no other agreements between Parent    
and the Parent Financial Advisor.                                               

SECTION 5.27 Information Supplied. None of the information supplied,      
supplied herein or to be supplied by Parent for inclusion in (a) the S-4        
Registration Statement to be filed with the SEC by Parent in connection with    
the issuance of shares of Parent Common Stock in the Merger (including the      
Joint Proxy Statement/Prospectus, constituting a part thereof) will, at the     
time the S-4 Registration Statement becomes effective under the Securities Act, 
contain any untrue statement of a material fact or omit to state any material   
fact required to be stated therein or necessary to make the statements therein, 
in light of the circumstances under which they are made, not misleading, and    
(b) the Joint Proxy Statement/Prospectus and any amendment or supplement        
thereto will, at the date such information is supplied and at the time of the   
meetings of the Company shareholders and Parent stockholders to be held to      
approve or adopt, as the case may be, this Agreement, contains or will contain  
any untrue statement of a material fact or omits or will omit to state any      
material fact required to be stated therein or necessary in order to make the   
statement therein, in light of the circumstances under which they were made,    
not misleading.                                                                 

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ARTICLE VI. 

COVENANTS 

SECTION 6.01 Conduct of Parent Pending the Closing. Parent agrees that,   
between the date of this Agreement and the Effective Time, unless Company shall 
otherwise agree in writing, (x) the respective businesses of Parent and the     
Parent Subsidiaries shall be conducted only in, and Parent and the Parent       
Subsidiaries shall not take any action except in, the ordinary course of        
business consistent with past practice and (y) Parent shall use its reasonable  
best efforts to keep available the services of such of the current officers,    
significant employees and consultants of Parent and the Parent Subsidiaries and 
to preserve the current relationships of Parent and the Parent Subsidiaries     
with such of the corporate partners, customers, suppliers and other Persons     
with which Parent or any Parent Subsidiary has significant business relations   
in order to preserve substantially intact its business organization. Without    
limitation, neither Parent nor any Parent Subsidiary shall, between the date of 
this Agreement and the Effective Time, directly or indirectly, do, or agree to  
do, any of the following (except to the extent contemplated in this Agreement)  
without the prior written consent of Company:                                   

(a) amend or otherwise change its certificate of incorporation, bylaws
or equivalent organizational documents;                                     

(b) issue, sell, pledge, dispose of, grant, transfer, lease, license, 
guarantee or encumber, or authorize the issuance, sale, pledge,             
disposition, grant, transfer, lease, license or encumbrance of, (i) any     
shares of capital stock of Parent or any Parent Subsidiary of any class, or 
securities convertible into or exchangeable or exercisable for any shares   
of such capital stock, or any options, warrants or other rights of any kind 
to acquire any shares of such capital stock, or any other ownership         
interest (including, without limitation, any phantom interest), of Parent   
or any Parent Subsidiary, other than the issuance of Parent Common Stock    
pursuant to the exercise of stock options, warrants or convertible          
securities therefor outstanding as of the date hereof or (ii) any material  
property or assets of Parent or any Parent Subsidiary except dispositions   
of inventory in the ordinary course of business consistent with past        
practice;                                                                   

(c) (i) acquire (including, without limitation, by merger,            
consolidation, or acquisition of stock or assets) any interest in any       
corporation, partnership, other business organization or Person or any      
division thereof, other than the purchase of assets in the ordinary course  
of business consistent with past practice; (ii) incur any indebtedness for  
borrowed money (other than indebtedness with respect to working capital in  
amounts consistent with past practice and the Bridge Loan) or issue any     
debt securities or assume, guarantee or endorse, or otherwise as an         
accommodation become responsible for, the obligations of any Person (other  
than a Parent Subsidiary) for borrowed money or make any loans or advances  
material to the business, assets, liabilities, financial condition or       
results of operations of Parent and the Parent Subsidiaries, taken as a     
whole; (iii) terminate, cancel or request any material change in, or agree  
to any material change in, any Parent Material Contract; (iv) make or       
authorize any capital expenditure; or (v) enter into or amend any contract, 
agreement, commitment or arrangement that, if fully performed, would not be 
permitted under this Section 6.01(c);                                       

 (d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its   
capital stock, except that any Parent Subsidiary may pay dividends or make  
other distributions to Parent or any other Parent Subsidiary;               

(e) reclassify, combine, split, subdivide or redeem, purchase or      
otherwise acquire, directly or indirectly, any of its capital stock except  
repurchases of unvested shares at cost in connection with the termination   
of the employment relationship with any employee pursuant to stock option   
or purchase agreements in effect on the date hereof;                        

 (f) accelerate, amend or change the period (or permit any acceleration,
amendment or change) of exercisability of Parent Stock Options or authorize 
cash payments in exchange for any Parent Stock Options;                     

(g) amend the terms of, any of its securities or any securities of any
Parent Subsidiary;                                                          

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(h) increase the compensation payable or to become payable to its     
directors, officers, consultants or employees, grant any rights to          
severance or termination pay to, or enter into any employment or severance  
agreement which provides benefits upon a change in control of Parent that   
would be triggered by the Merger with, any director, officer, consultant or 
other employee or Service Provider of Parent or any Parent Subsidiary;      
establish, adopt, enter into or amend any collective bargaining, bonus,     
profit sharing, thrift, compensation, stock option, restricted stock,       
pension, retirement, deferred compensation, employment, termination,        
severance or other plan, agreement, trust, fund, policy or arrangement for  
the benefit of any director, officer, consultant or employee of Parent or   
any Parent Subsidiary, except to the extent required by applicable Law, or  
enter into or amend any contract, agreement, commitment or arrangement      
between Parent or any Parent Subsidiary and any of Parent's directors,      
officers, consultants or employees or Service Providers;                    

(i) pay, discharge or satisfy any claims, liabilities or obligations  
(absolute, accrued, asserted or unasserted, contingent or otherwise), other 
than the payment, discharge or satisfaction of claims, liabilities or       
obligations (A) in the ordinary course of business and consistent with past 
practice or (B) claims, liabilities or obligations reflected on the Parent  
December 2000 Balance Sheet or (C) as otherwise set forth on Schedule 6.01  
of the Parent Disclosure Schedule;                                          

(j) except as required by any Governmental Entity, make any material  
change with respect to Parent's accounting policies, principles, methods or 
procedures, including, without limitation, revenue recognition policies,    
other than as required by GAAP;                                             

 (k) make any material Tax election or settle or compromise any material
Tax liability; or                                                           

(l) authorize or enter into any formal or informal agreement or       
otherwise make any commitment to do any of the foregoing or to take any     
action which would make any of the representations or warranties of Parent  
contained in this Agreement untrue or incorrect or prevent Parent from      
performing or cause Parent not to perform its covenants hereunder or result 
in any of the conditions to the Merger set forth herein not being           
satisfied.                                                                  

SECTION 6.02 Conduct of Company Pending the Closing. Company agrees that, 
unless Parent shall otherwise agree in writing, Company shall not, between the  
date of this Agreement and the Effective Time, directly or indirectly (except   
to the extent contemplated by this Agreement) without the prior written consent 
of Parent, (i) sell, pledge, dispose of, transfer or encumber, or authorize the 
sale, pledge, disposition, transfer or encumbrance of any material property or  
assets of Company except in the ordinary course of business or (ii) authorize   
or enter into any formal or informal agreement or otherwise make any commitment 
to do any of the foregoing or to take any action which would make any of the    
representations or warranties of Company contained in this Agreement untrue or  
incorrect or prevent Company from performing or cause Company not to perform    
its covenants hereunder or result in any of the conditions to the Merger set    
forth herein not being satisfied.                                               

SECTION 6.03 Notices of Certain Events. Each of Parent and Company shall  
give prompt notice to the other of (i) any notice or other communication from   
any Person alleging that the consent of such Person is or may be required in    
connection with the Merger; (ii) any notice or other communication from any     
Governmental Entity in connection with the Merger; or (iii) any actions, suits, 
claims, investigations or proceedings commenced or, to the Knowledge of Company 
or the Knowledge of Parent, as the case may be, threatened against, relating to 
or involving or otherwise affecting Parent or the Parent Subsidiaries or        
Company, respectively, which, if pending on the date hereof, would have been    
required to have been disclosed in this Agreement, or that relate to the        
consummation of the Merger. Parent shall give the Company prompt notice of (i)  
the occurrence of a default or event that, with the giving of notice or lapse   
of time or both, will become a default under any Parent Material Contract and   
(ii) any change that could reasonably be expected to have a Parent Material     
Adverse Effect or to delay or impede the ability of Parent to perform its       
obligations pursuant to this Agreement.                                         

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SECTION 6.04 Access to Information; Confidentiality.                      

 (a) Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which Parent or Company or any of the Parent        
Subsidiaries is a party or pursuant to applicable Law or the regulations or     
requirements of any stock exchange or other regulatory organization with whose  
rules a party hereto is required to comply, from the date of this Agreement to  
the Effective Time, Parent and Company shall (and Parent shall cause the Parent 
Subsidiaries to) (i) provide to the other (and its officers, directors,         
employees, accountants, consultants, legal counsel, agents and other            
representatives (collectively, "Representatives")) access at reasonable times   
upon prior notice to its and its Subsidiaries' officers, employees, agents,     
properties, offices and other facilities and to the books and records thereof,  
and (ii) furnish promptly such information concerning its and its subsidiaries' 
business, properties, contracts, assets, liabilities and personnel as the other 
party or its Representatives may reasonably request. No investigation conducted 
pursuant to this Section 6.04 shall affect or be deemed to modify any           
representation or warranty made in this Agreement.                              

(b) The parties hereto shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the   
Confidentiality Agreement with respect to the information disclosed pursuant to 
this Agreement.                                                                 

SECTION 6.05 Reorganization.                                              

(a) From and after the date of this Agreement, each party hereto shall use
all reasonable efforts to cause the Merger to qualify, and shall not knowingly  
take any actions or cause any actions to be taken which could reasonably be     
expected to prevent the Merger from qualifying as a "reorganization" under      
Section 368(a) of the Code.                                                     

 (b) Each of Company and Parent shall execute and deliver to Company counsel
and Parent counsel a certificate, in form reasonably acceptable to Company and  
Parent, as the case may be, signed by an officer of Company or Parent, as the   
case may be, setting forth factual representations and covenants that will      
serve as a basis for the tax opinions required under Section 8.02(e) and        
Section 8.03(e) hereof.                                                         

SECTION 6.06 Further Action; Consents; Filings.                           

  (a) Upon the terms and subject to the conditions hereof, each of the parties
hereto shall use all reasonable efforts to (i) take, or cause to be taken, all  
appropriate action, and do, or cause to be done, all things necessary, proper   
or advisable under applicable Law or otherwise to consummate and make effective 
the Merger, (ii) obtain from Governmental Entities any consents, licenses,      
permits, waivers, approvals, authorizations or orders required to be obtained   
or made by Parent, Parent's Subsidiaries or Company in connection with the      
authorization, execution and delivery of this Agreement and the consummation of 
the Merger and (iii) make all necessary filings, and thereafter make any other  
required or appropriate submissions, with respect to this Agreement and the     
Merger required under (A) the rules and regulations of the NNM, (B) the         
Securities Act, the Exchange Act and any other applicable Federal or state      
securities Laws, (C) the HSR Act, if applicable, and (D) any other applicable   
Law. The parties hereto shall cooperate and consult with each other in          
connection with the making of all such filings, including by providing copies   
of all such documents to the nonfiling parties and their advisors prior to      
filing, and neither of the parties shall file any such document if the other    
party shall have reasonably objected to the filing of such document. No party   
shall consent to any voluntary extension of any statutory deadline or waiting   
period or to any voluntary delay of the consummation of the Merger at the       
behest of any Governmental Entity without the consent and agreement of the      
other party hereto, which consent shall not be unreasonably withheld or         
delayed.                                                                        

(b) Each of Company and Parent will give (or Parent will cause its        
Subsidiary to give) any notices to third Persons, and use, and Parent will      
cause its Subsidiaries to use, reasonable efforts to obtain any consents from   
third Persons necessary, proper or advisable to consummate the transactions     
contemplated by this Agreement.                                                 

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SECTION 6.07 Additional Reports.                                          

(a) As soon as reasonably practicable, but in no event later than 30      
business days prior to the Effective Time, Parent shall provide to Company      
copies of the audited consolidated balance sheets of the Parent and the Parent  
Subsidiaries at December 31, 2000, together with related audited consolidated   
statement of operations, stockholders' equity and cash flows for the year ended 
December 31, 2000 and the notes thereto (the "Audited Parent Financial          
Statements"). The Audited Parent Financial Statements shall be prepared in      
accordance with GAAP applied on a consistent basis throughout the periods       
indicated (except as may be indicated in the notes thereto) and each present    
fairly the consolidated financial position of Parent and the Parent             
Subsidiaries as at the respective dates thereof, and their consolidated results 
of operations, stockholders' equity and cash flows for the respective periods   
indicated therein, except as otherwise noted therein (subject to immaterial     
year-end adjustments). Parent shall have filed its Annual Report on Form 10-K   
with the SEC in a timely manner in accordance with the requirements of the      
Exchange Act.                                                                   

(b) Parent shall furnish to Company copies of any reports of the type     
referred to in Section 5.07, which it files with the SEC on or after the date   
hereof, and Parent covenants and warrants that as of the respective dates       
thereof, such reports will not contain any untrue statement of a material fact  
or omit to state a material fact required to be stated therein or necessary to  
make the statements therein, in light of the circumstances under which they     
were made, not misleading. Any consolidated interim financial statements        
included in such reports (including any related notes and schedules) will       
fairly present the financial position of Parent and its consolidated            
subsidiaries as of the dates thereof and the results of operations and changes  
in financial position or other information including therein for the periods or 
as of the date then ended (subject, where appropriate, to normal year-end       
adjustments), in each case in accordance with past practice and GAAP (except    
for the absence of footnotes) consistently applied during the periods involved  
(except as otherwise disclosed in the notes thereto).                           

 (c) Company shall furnish to Parent copies of any reports which it provides
to Noteholders on or after the date hereof, and Company covenants and warrants  
that as of the respective dates thereof, such reports will not contain any      
untrue statement of a material fact or omit to state a material fact required   
to be stated therein or necessary to make the statements therein, in light of   
the circumstances under which they were made, not misleading. Any condensed     
interim financial statements included in such reports (including any related    
notes and schedules) will fairly present the financial position of Company as   
of the dates thereof and the results of operations and changes in financial     
position or other information including therein for the periods or as of the    
date then ended (subject, where appropriate, to normal year-end adjustments),   
in each case in accordance with past practice and GAAP (except for the absence  
of footnotes) consistently applied during the periods involved (except as       
otherwise disclosed in the notes thereto).                                      

ARTICLE VII 

ADDITIONAL AGREEMENTS 

SECTION 7.01 Joint Proxy Statement/Prospectus.                            

(a) As promptly as reasonably practicable after the execution of this     
Agreement, Company and Parent shall prepare and Parent shall file with the SEC  
an S-4 Registration Statement (including the Proxy Statement/Prospectus),       
registering the offer and sale of shares of the Parent Common Stock, which      
complies with the rules and regulations promulgated by the SEC, and the Company 
and Parent shall use all reasonable efforts to cause the S-4 Registration       
Statement to become effective as soon thereafter as practicable. Parent, with   
the assistance of the Company when necessary, shall also use its reasonable     
best efforts to obtain prior to the effective date of the S-4 Registration      
Statement all necessary state securities law or "blue sky" permits and          
approvals required in connection with the Merger and to consummate the other    
transactions contemplated by this Agreement. Parent or Company, as the case may 
be, shall, upon request by the other, furnish the other with                    

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all information concerning itself, its Subsidiaries, directors, executive       
officers and shareholders or stockholders, as the case may be, and such other   
matters as may be reasonably necessary or advisable in connection with the      
Joint Proxy Statement/Prospectus, the S-4 Registration Statement or any other   
statement, filing, notice or application made by or on behalf of the Company or 
Parent or any of their respective Subsidiaries to any third party and/or any    
Governmental Entity in connection with the Merger and the transactions          
contemplated by this Agreement, including, without limitation, providing pro    
forma financial information regarding Parent and the Company, if necessary.     

(b) The Joint Proxy Statement/Prospectus prepared by Company and Parent in
connection the Merger with respect to the special meetings of Company's         
shareholders to be held to consider approval of this Agreement and the Merger   
(the "Company Shareholders' Meeting") and of Parent's stockholders to be held   
to consider the approval of the issuance of shares of Parent Common Stock       
("Share Issuance") to Company's shareholders pursuant to the Merger (the        
"Parent Stockholders' Meeting") shall include (i) with respect to Company and   
its shareholders, (x) the approval of the Merger and the unanimous              
recommendation of the disinterested members of the board of directors of        
Company to Company's shareholders that they vote in favor of approval of this   
Agreement and (y) an election form under which the holders of Company Preferred 
Stock may elect to convert the Company Preferred Stock held by them immediately 
prior to the Closing in accordance with the Company's articles of               
incorporation; provided, however, that nothing in this Agreement shall prevent  
the board of directors of the Company from withholding, withdrawing, amending   
or modifying its recommendation in favor of approval and adoption of this       
Agreement and approval of the Merger if: (A) a Company Superior Proposal is     
made to the Company and is not withdrawn and (B) the board of directors of the  
Company concludes in good faith, consistent with the advice of outside counsel  
admitted to practice in California, that, in light of such Company Superior     
Proposal, the failure to withhold, withdraw, amend or modify such               
recommendation would likely be inconsistent with the fiduciary duties of the    
board of directors of Company to Company shareholders under applicable law, and 
(ii) with respect to Parent and its stockholders, (x) the approval of the Share 
Issuance, and the unanimous recommendation of the disinterested members of the  
board of directors of Parent to Parent's stockholders that they vote in favor   
of approval of this Agreement, the Merger and the Share Issuance, (y) the       
opinion of Parent Financial Advisor referred to in Section 5.24, (z) a proposal 
to amend Parent's certificate of incorporation to (1) change its name to Mayan  
Networks Corporation as of the Effective Time, (2) increase the Parent Common   
Stock in order to reserve a sufficient number of authorized but unissued Parent 
Common Stock for issuance in the Merger and upon exercise or conversion of the  
Company Rights and (3) effect the Reverse Stock Split of the Parent Common      
Stock and (xx) a proposal to adopt the 2001 Plan (collectively, the "Parent     
Meeting Proposals"); provided, however, that nothing in this Agreement shall    
prevent the board of directors of Parent from withholding, withdrawing,         
amending or modifying its recommendation in favor of approval and adoption of   
this Agreement and approval of the Merger if: (A) a Parent Superior Proposal is 
made to the Parent and is not withdrawn, (B) neither the Parent nor any of its  
representatives shall have violated any of the restrictions set forth in        
Section 7.19 and (C) the board of directors of the Parent concludes in good     
faith, consistent with advice of outside counsel admitted to practice law in    
Delaware, that, in light of such Parent Superior Proposal, the failure to       
withhold, withdraw, amend or modify such recommendation would likely be         
inconsistent with the fiduciary duties of the board of directors of Parent to   
Parent stockholders under applicable law.                                       

  (c) The Company shall use its reasonable best efforts to ensure that none of
the information supplied by Company for inclusion or incorporation by reference 
in the Joint Proxy Statement/Prospectus shall, at the date it or any amendments 
or supplements thereto are mailed to shareholders of Company and the            
stockholders of the Parent, at the time of the Company Shareholders' Meeting,   
at the time of the Parent Stockholders' Meeting and at the Effective Time,      
contain any untrue statement of a material fact or omit to state any material   
fact required to be stated therein or necessary in order to make the statements 
therein, in light of the circumstances under which they are made, not           
misleading. If at any time prior to the Effective Time any event or             
circumstance relating to Company, or its officers or directors, should be       
discovered by Company that should be set forth in an amendment or a supplement  
to the Joint Proxy Statement/Prospectus, Company shall promptly inform Parent.  

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 (d) The Parent shall use its reasonable best efforts to ensure that none of
the information supplied by Parent for inclusion or incorporation by reference  
in the Joint Proxy Statement/Prospectus shall, at the date it or any amendments 
or supplements thereto are mailed to shareholders of Company and the            
stockholders of the Parent, at the time of the Company Shareholders' Meeting,   
at the time of the Parent Stockholders' Meeting and at the Effective Time,      
contain any untrue statement of a material fact or omit to state any material   
fact required to be stated therein or necessary in order to make the statements 
therein, in light of the circumstances under which they are made, not           
misleading. If, at any time prior to the Effective Time, any event or           
circumstance relating to Parent or any Parent Subsidiary, or their respective   
officers or directors, should be discovered by Parent that should be set forth  
in an amendment or a supplement to the Joint Proxy Statement/Prospectus, Parent 
shall promptly inform Company. All documents that Parent is responsible for     
filing with the SEC in connection with the Merger will comply as to form in all 
material respects with the applicable requirements of the rules and regulations 
of the Securities Act and the Exchange Act.                                     

SECTION 7.02 Shareholders' Meetings. Unless a Company Superior Proposal is
made to the Company and is not withdrawn and the board of directors of the      
Company concludes in good faith, consistent with the advice of outside counsel  
admitted to practice in California, that, in light of such Company Superior     
Proposal, the failure to withhold, withdraw, amend or modify such               
recommendation would likely be inconsistent with the fiduciary duties of the    
board of directors of Company to Company shareholders under applicable law, the 
Company shall call and hold the Company Shareholders' Meeting, and unless (A) a 
Parent Superior Proposal is made to the Parent and is not withdrawn, (B)        
neither the Parent nor any of its representatives shall have violated any of    
the restrictions set forth in Section 7.19 and (C) the board of directors of    
the Parent concludes in good faith, consistent with advice of outside counsel   
admitted to practice law in Delaware, that, in light of such Parent Superior    
Proposal, the failure to withhold, withdraw, amend or modify such               
recommendation would likely be inconsistent with the fiduciary duties of the    
board of directors of Parent to Parent stockholders under applicable law, the   
Parent shall call and hold the Parent Stockholders' Meeting, as promptly as     
practicable after the date hereof for the purpose of voting upon the approval   
of the matters described in Section 7.01(b), pursuant to the Joint Proxy        
Statement/Prospectus, and the Company and the Parent shall use all reasonable   
efforts to hold the Company Shareholders' Meeting and the Parent Stockholders'  
Meeting on the same date and as soon as practicable after the date hereof.      
Except as otherwise contemplated by this Agreement, and subject to applicable   
law, the Company shall use all reasonable efforts to solicit from its           
shareholders proxies in favor of the approval of this Agreement pursuant to the 
Joint Proxy Statement/Prospectus and shall take all other action necessary or   
advisable to secure the vote or consent of shareholders required by California  
Law to obtain such approval. Except as otherwise contemplated by this           
Agreement, and subject to applicable law, the Parent shall use all reasonable   
efforts to solicit from its stockholders proxies in favor of the Parent Meeting 
Proposals pursuant to the Joint Proxy Statement/Prospectus and shall take all   
other action necessary or advisable to secure the vote or consent of            
stockholders required by the applicable stock exchange requirements to obtain   
such approval. Each of the parties hereto shall use take all other action       
necessary or, in the opinion of the other parties hereto, advisable to promptly 
and expeditiously secure any vote or consent of shareholders required by        
applicable Law and such party's articles of incorporation or certificate of     
incorporation, as the case may be, and bylaws to effect the Merger.             

SECTION 7.03 Directors' and Officers' Indemnification and Insurance.      

(a) The provisions with respect to immunities and indemnification that are
set forth in the certificate of incorporation and bylaws of the Surviving       
Corporation shall not be amended, repealed or otherwise modified for a period   
of six years from the Effective Time in any manner that would affect adversely  
the rights thereunder of individuals who at or at any time prior to the         
Effective Time were directors, officers, employees or agents of Company.        

 (b) From and after the Effective Time, Parent and the Surviving Corporation
shall indemnify and hold harmless each present and former director and officer  
of Company (the "Indemnified Parties"), against any costs or expenses           
(including reasonable attorneys' fees and disbursements), judgments, fines,     
losses, claims, damages or liabilities (collectively, "Costs") incurred in      
connection with any claim, action, suit, proceeding or                          

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investigation, whether civil, criminal, administrative or investigative,        
arising out of or pertaining to matters relating to their service as such an    
officer or director existing or occurring at or prior to the Effective Time,    
whether asserted or claimed prior to, at or after the Effective Time, to the    
fullest extent that Company would have been permitted under California Law and  
its articles of incorporation, bylaws and existing contractual arrangements     
(each as in effect on the date hereof) to indemnify such Indemnified Parties.   

 (c) Surviving Corporation shall maintain directors' and officers' liability
insurance policies in amounts and with coverages equivalent to those of Parent  
as in effect on the date hereof. In addition, for a period of six (6) years     
after the Effective Time, Surviving Corporation shall maintain in effect the    
directors' and officers' liability insurance policies previously maintained by  
Company.                                                                        

 SECTION 7.04 Public Announcements. The initial press release concerning the
Merger to be released in connection with the execution and delivery of this     
Agreement shall be a joint press release and, thereafter, Parent and Company    
shall consult with each other before issuing any press release or otherwise     
making any public statements with respect to this Agreement or the Merger and   
shall not issue any such press release or make any such public statement        
without the prior approval of the other, except to the extent required by       
applicable Law or the requirements of the rules and regulations of the NNM, in  
which case the issuing party shall consult with the other party before issuing  
any such release or making any such public statement.                           

SECTION 7.05 Voting Agreements.                                           

(a) The Parent shall use its reasonable best efforts, on behalf of Company
and pursuant to the request of Company, to cause each Parent stockholder named  
in Schedule 7.05(a) to execute and deliver to Company a Voting Agreement        
substantially in the form of Annex A attached hereto concurrent with the        
execution of this Agreement.                                                    

(b) Company shall use its reasonable best efforts, on behalf of Parent and
pursuant to the request of Parent, to cause each Company stockholder named in   
Schedule 7.05(b) to execute and deliver to Parent a Voting Agreement            
substantially in the form of Annex B attached hereto concurrent with the        
execution of this Agreement.                                                    

SECTION 7.06 Employment Agreements. Parent shall use its best efforts to  
cause each of the individuals named in Schedule III to deliver to Company an    
executed Employment Agreement substantially in the form attached hereto as      
Annex C.                                                                        

SECTION 7.07 Market Standoff Agreements. Company shall use its reasonable 
best efforts, on behalf of the Parent and pursuant to the request of Parent, to 
cause each Company shareholder named in Schedule 7.07 to execute and deliver to 
the Parent a Market Standoff Agreement substantially in the form attached       
hereto as Annex D.                                                              

SECTION 7.08 Market Standoff Agreements. Parent shall use its reasonable  
best efforts, on behalf of the Company and pursuant to the request of Company,  
to cause each Parent stockholder named in Schedule 7.08 to execute and deliver  
to the Company a Market Standoff Agreement substantially in the form attached   
hereto as Annex D.                                                              

SECTION 7.09 NNM Listing.                                                 

(a) Prior to the Effective Time, Parent shall file with the NNM a         
Notification Form for Listing of Additional Shares with respect to the Parent   
Common Stock issuable in connection with the Merger and shall use all           
reasonable efforts to have such Parent Common Stock to be issued in the Merger  
and upon exercise of Company Stock Options, Company Warrants and the            
Convertible Subordinated Promissory Notes approved for quotation on the NNM.    

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(b) Prior to the Effective Time, Parent and Company shall prepare and file
an application for initial inclusion of the Surviving Corporation on the NNM.   

SECTION 7.10 Blue Sky. Parent, with the assistance of Company when        
necessary, shall use all reasonable efforts to obtain prior to the Effective    
Time all necessary permits and approvals required under Blue Sky Laws to permit 
the distribution of the Parent Common Stock to be issued in accordance with the 
provisions of this Agreement.                                                   

SECTION 7.11 Reservation of Shares. Parent shall reserve for issuance the 
number of Parent Common Stock that will be issuable upon exercise of the        
Company Rights assumed pursuant to Section 3.05 hereof.                         

SECTION 7.12 2001 Stock Incentive Plan. Prior to the Effective Time, the  
Board of Directors of Parent shall adopt a 2001 Stock Incentive Plan, in the    
form attached as Annex F hereto (the "2001 Plan"). The 2001 Plan shall serve as 
the successor to the Parent Stock Plans and the Company Stock Plan. The board   
of directors of Parent shall take such actions as may be necessary and          
appropriate so that at the Effective Time, all the Parent Stock Options         
outstanding under the Parent Stock Plans shall be transferred to the 2001 Plan  
and shall be treated as outstanding options under the 2001 Plan; provided,      
however, that each outstanding option so transferred shall continue to be       
governed solely by the terms of the documents evidencing such options and no    
provision of the 2001 Plan shall be deemed to affect or otherwise modify the    
rights or obligations of the holders of such transferred options. Parent shall  
cause the 2001 Plan to be submitted to the stockholders of the Parent for their 
approval at the Parent Stockholders' Meeting with the recommendation of the     
board of directors.                                                             

SECTION 7.13 Waiver from Certain Holders of Outstanding Parent Stock      
Options. Prior to the Effective Time, Parent shall use its best efforts to      
obtain, from each optionee listed on Schedule 7.13 (including all optionees     
with options issued under Parent's 1995 Stock Option Plan), each of whom is     
holding a Parent Stock Option that has or may have a right to accelerated       
vesting due to the Merger, a waiver of any such right to acceleration.          

SECTION 7.14 Registration Statements on Form S-8. Within twenty (20)      
Business Days after the Effective Time, the Surviving Corporation shall file    
with the SEC one or more registration statements on Form S-8 for the shares of  
Parent Common Stock issuable pursuant to outstanding options under the Company  
Stock Plan assumed by Parent, provided that such options qualify for            
registration on such Form S-8 and will maintain the effectiveness of such       
registration statements for so long as any of such options or other rights      
remain outstanding.                                                             

  SECTION 7.15 Employee Matters. Simultaneously with the Merger, the Surviving
Corporation shall assume all employment agreements and termination benefit      
agreements and arrangements which are in effect at Company on the date hereof.  
The Company and Parent agree to cooperate and take such reasonable actions as   
may be required to effect an orderly transition of benefits coverage under      
Company's 401(k) plan, including but not limited to, termination of such plan.  
As of the Effective Time, the Surviving Corporation shall honor and satisfy all 
obligations and liabilities with respect to the Company Benefit Plans.          
Notwithstanding the foregoing, the Surviving Corporation shall not be required  
to continue any particular Company Benefit Plan after the Effective Time, and   
any Company Benefit Plan may be amended or terminated in accordance with its    
terms and applicable law. To the extent that any Company Benefit Plan is        
terminated or amended after the Effective Time so as to reduce the benefits     
that are then being provided with respect to participants thereunder, Surviving 
Corporation shall arrange for each individual who is then a participant in such 
terminated or amended plan to participate in a comparable benefit plan          
maintained by Surviving Corporation in accordance with the eligibility criteria 
thereof. All welfare benefit plans of the Parent or the Surviving Corporation   
in which the Company's employees participate after the Effective Time shall     
provide coverage for preexisting health conditions to the same extent those     
conditions were covered under the applicable plans or programs of the Company   
as of the Effective Time, and all limitations as to pre-existing conditions,    
exclusions and waiting periods shall accordingly be waived with respect to      
participation and coverage under those plans, other than limitations or         

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waiting periods already in effect with respect to one or more Company employees 
which had not been satisfied as of the Effective Time under any welfare plan    
maintained for such Company employees immediately prior to the Effective Time.  
In addition, under each such welfare benefit plan of the Parent or the          
Surviving Corporation, the outstanding claims and expenses incurred by the      
Company's employees under each corresponding welfare benefit plan of the        
Company for the portion of the plan year preceding the Effective Time shall be  
recognized, and the Company's employees shall be given credit for amounts paid  
by them under each corresponding benefit plan of the Company, for the portion   
of the plan year preceding the Effective Time, for purposes of applying         
deductibles, co-payments and out-of-pocket maximums as though such amounts had  
been paid in accordance with the terms and conditions of the successor welfare  
benefit plan of the Parent or the Surviving Corporation.                        

SECTION 7.16 Parent Rights Plan. Parent shall take all necessary action to
ensure that none of the transactions contemplated by this Agreement or any of   
the agreements contemplated hereby will cause (i) Company or any of its         
affiliates or associates to become an Acquiring Person (as defined in the       
Parent Rights Plan) for purposes of the Parent Rights Plan, or (ii) otherwise   
affect in any way the rights under the Parent Rights Plan, including by causing 
such rights to separate from the underlying shares or by giving such holders    
the right to acquire securities of any party hereto.                            

SECTION 7.17 Filing of Reports Necessary for Use of Rule 145. After the   
Effective Time, Surviving Corporation shall use reasonable efforts to file all  
reports and data with the SEC necessary to permit the shareholders of Company   
and stockholders of Parent who may be deemed "underwriters" (within the meaning 
of Rule 145 under the Securities Act) of Company Common Stock and Company       
Preferred Stock to sell Parent Common Stock received by them in connection with 
the Merger pursuant to Rules 144 and 145(d) under the Securities Act if they    
would otherwise be so entitled. After the Effective Time, Surviving Corporation 
will use reasonable efforts to file with the SEC reports, statements, and other 
materials required by the federal securities laws on a timely basis.            

SECTION 7.18 Resignations of Officers and Directors.                      

(a) Parent shall deliver at the Closing the voluntary resignations of each
officer of Parent from their positions as officers who is not designated to be  
an officer of Parent in accordance with subsection 2.05(b), which resignation   
shall be effective at the Effective Time, and those persons listed on Schedule  
I hereto, shall have been elected as officers of Parents, to hold office until  
their successor are elected or appointed and qualified or until their           
resignation or removal; and                                                     

(b) Parent shall deliver at the Closing the voluntary resignations of each
director of Parent from their positions as directors who is not designated to   
be a director of Parent in accordance with subsection 2.05(c), which            
resignation shall be effective at the Effective Time, and those persons listed  
on Schedule II hereto, shall have been elected as directors of Parent in each   
case until their successors are elected or appointed and qualified or until     
their resignation or removal.                                                   

SECTION 7.19 No Solicitation.                                             

 (a) From the date of this Agreement until the earlier of the Effective Time
or termination of this Agreement, pursuant to Section 9.01, the Parent shall    
not directly or indirectly, and shall not authorize or permit any Subsidiary of 
the Parent or any Representative of the Parent or Parent Subsidiaries directly  
or indirectly to, (i) solicit, initiate, encourage or induce the making,        
submission or announcement of any Acquisition Proposal or take any action that  
would, individually or in the aggregate, reasonably be expected to lead to an   
Acquisition Proposal, (ii) furnish any information regarding Parent or any      
Parent subsidiaries to any Person in connection with or in response to an       
Acquisition Proposal or an inquiry or indication of interest that could lead to 
an Acquisition Proposal, (iii) engage in discussions with any Person with       
respect to any Acquisition Proposal, (iv) approve, endorse or recommend any     
Acquisition Proposal or (v) enter into any letter of intent or similar document 
or any contract contemplating or otherwise relating to any Acquisition          
Proposal;                                                                       

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provided, however, that nothing herein shall prohibit the Parent's Board of     
Directors from complying with Rules 14d-9 or 14e-2 under the Exchange Act; and  
provided, further, that prior to the required Parent stockholder approval, this 
Section 7.19 shall not prohibit the Parent from furnishing nonpublic            
information regarding Parent or any Parent Subsidiaries to, or entering into    
discussions with, any Person in response to an Acquisition Proposal that is     
submitted to the Parent by such Person (and not withdrawn) if (1) neither the   
Parent nor any Representative of Parent or any Parent subsidiaries shall have   
violated in any material respect any of the restrictions set forth in this      
Section 7.19 (other than Section 7.19(ii) or Section 7.19(iii)), (2) the        
Acquisition Proposal constitutes a Parent Superior Proposal, (3) the Board of   
Directors of the Parent concludes in good faith consistent with advice of       
outside counsel admitted to practice law in the State of Delaware, that, in     
light of such Parent Superior Proposal, the failure to take such action would   
likely be inconsistent with the fiduciary duties of the Board of the Directors  
of the Parent to the Parent's stockholders under applicable law, (4) at least   
24 hours prior to furnishing any such nonpublic information to, or entering     
into discussions with, such Person, the Parent gives the Company written notice 
of the identity of such Person and of the Parent's intention to furnish         
nonpublic information to, or enter into discussions with, such Person, and the  
Parent receives from such Person an executed confidentiality agreement          
containing customary limitations on the use and disclosure of all nonpublic     
written and oral information furnished to such Person by or on behalf of the    
Parent, and (5) prior to furnishing any such nonpublic information to such      
Person, the Parent furnishes such nonpublic information to the Company (to the  
extent such nonpublic information has not been previously furnished by the      
Parent to the Company). Without limiting the generality of the foregoing (x)    
the parent acknowledges and agrees that any violation of any of the             
restrictions set forth in the preceding sentence by any Representative of       
Parent or any Parent subsidiaries, whether or not such Representative is        
purporting to act on behalf of Parent or any Parent subsidiaries, shall be      
deemed to constitute a breach of this Section 7.19 by the Company, and (y) the  
Company acknowledges and agrees that the taking of any action permitted by and  
in accordance with this Section 7.19 shall not constitute a breach of this      
Agreement.                                                                      

(b) The Parent shall promptly (and in no event later than 24 hours after  
receipt of any Acquisition Proposal, any inquiry or indication of interest that 
could reasonably be expected to lead to an Acquisition Proposal or any request  
for nonpublic information) advise the Company orally and in writing of any      
Acquisition Proposal, any inquiry or indication of interest that could          
reasonably be expected to lead to an Acquisition Proposal or any request for    
nonpublic information relating to Parent or any Parent subsidiaries (including  
the identity of the Person making or submitting such Acquisition Proposal,      
inquiry, indication of interest or request, and the terms thereof) that is made 
or submitted by any Person prior to the Closing. The Parent shall keep the      
Company fully informed with respect to the status of any such Acquisition       
Proposal, inquiry, indication of interest or request and any modification or    
proposed modification thereto.                                                  

(c) The Parent shall immediately cease and cause to be terminated any     
existing discussions with any Person that relate to any Acquisition Proposal.   

(d) The Parent agrees not to release or permit the release of any Person  
from, or to waive or permit the waiver of any provision of, any                 
confidentiality, "standstill" or similar agreement to which Parent or any       
Parent subsidiaries is a party, and will use its reasonable best efforts to     
enforce or cause to be enforced each such argument at the request of the        
Company. The Parent also will promptly request each Person that has executed,   
within 12 months prior to the date of this Agreement, a confidentiality         
agreement in connection with its consideration of a possible acquisition        
transaction or equity investment to return all confidential information         
heretofore furnished to such Person by or on behalf of Parent or any Parent     
Subsidiaries.                                                                   

SECTION 7.20 Notice of Merger. Not later than fifteen days prior to the   
Effective Time, the Company shall give such notices relating to the Merger as   
are required under Section 15.10 of the Indenture.                              

 SECTION 7.21 Registration Statement for Convertible Subordinated Promissory
Notes, Exchange Notes and Underlying Conversion Shares. Parent shall prepare    
and file one or more registration statements with the SEC, which registration   
statements shall be declared effective at the Effective Time, covering the      
resale of the Convertible Subordinated Promissory Notes, the Exchange Notes and 
such shares of Parent Common Stock as                                           

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are issuable to the Noteholders upon conversion of the Convertible Subordinated 
Promissory Notes and the Exchange Notes after the Merger (the "Underlying       
Conversion Shares") and which, in the case of the registration statement        
covering the Subordinated Promissory Notes and the Underlying Conversion Shares 
into which such Subordinated Promissory Notes are convertible, shall satisfy    
the requirements of the Registration Rights Agreement, dated as of October 25,  
2000, between the Company and Robertson Stephens, Inc. (the "Registration       
Rights Agreement") as if (i) the Parent were the Company (as such term in       
defined in the Registration Rights Agreement); (ii) such registration statement 
were the registration statement provided for under the terms of the             
Registration Rights Agreement; and (iii) such registration statement were       
required to be effective under the Registration Rights Agreement at the         
Effective Time.                                                                 

SECTION 7.22 Compensation Committee Ratification. Parent's board of       
directors shall have (i) ratified the establishment of Mr. Dennis Schneider as  
the sole member of the Compensation Committee of the Parent board of directors, 
with the authority to grant Parent Stock Options under the Parent Stock Plans   
and (ii) ratified the previous grants of Parent Stock Options made by Mr.       
Dennis Schneider pursuant to his authority as the Compensation Committee of the 
Parent board of directors.                                                      

SECTION 7.23 Bridge Loan.                                                 

(a) Provided this Agreement has not been terminated, the Company agrees to
advance to Parent, on an as-needed-basis, bridge loans of up to an aggregate of 
$2 Million for the purpose of financing operating expenses incurred in the      
ordinary course of business, pursuant to the terms set forth in the form of     
Bridge Loan attached hereto as Annex G, and subject to execution and delivery   
of such Bridge Loan by Parent. Each advance of all or any portion of the Bridge 
Loan shall be subject to the conditions that (i) the representations and        
warranties of Parent set forth in this Agreement shall be true and correct in   
all material respects as of the time of such advance, (ii) Parent shall not     
have breached in any material respect any covenant contained in this Agreement, 
and (iii) Parent shall have given the Company at least three (3) days' written  
notice requesting such advance and affirming that the conditions described in   
clauses (i) and (ii) have been satisfied.                                       

  (b) The Bridge Loan shall be due and payable on the earlier of the Effective
Time or the Company's demand following termination of this Agreement, as set    
forth in the form of Bridge Loan. Additionally, upon the occurrence of certain  
"Events of Default" as defined therein, including, but not limited to (i) the   
failure by Parent to timely file its Annual Report on Form 10-K in accordance   
with the Exchange Act or (ii) the existence of any material changes to the      
Parent Financial Statements, the Bridge Loan shall become immediately due and   
payable.                                                                        

ARTICLE VIII

CONDITIONS TO THE MERGER

SECTION 8.01 Conditions to the Obligations of Each Party to Consummate the
Merger. The obligations of the parties hereto to consummate the Merger are      
subject to the satisfaction or, if permitted by applicable Law, waiver of the   
following conditions:                                                           

(a) this Agreement shall have been duly approved by the requisite vote
of shareholders of Company in accordance with California Law and by the     
requisite vote of stockholders of Parent in accordance with the rules of    
the NNM and applicable Law;                                                 

(b) no law, order, statute, rule, regulation, domestic or foreign,    
executive order, stay, decree, judgment or injunction shall have been       
enacted, entered, promulgated or enforced by any court or Governmental      
Entity which prohibits, prevents or makes illegal the consummation of the   
Merger which has not been vacated, dismissed or withdrawn prior to the      
Effective Time. Company and Parent shall use their reasonable best efforts  
to have any of the foregoing vacated, dismissed or withdrawn by the         
Effective Time;                                                             

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  (c) the S-4 Registration Statement shall have become effective under the
Securities Act. No stop order suspending the effectiveness of the S-4       
Registration Statement shall have been issued, and no proceeding for that   
purpose shall have been initiated or be threatened, by the SEC;             

(d) any waiting period (and any extension thereof) applicable to the  
consummation of the Merger under the HSR Act, or any other applicable       
competition, merger control or similar Law shall have expired or been       
terminated;                                                                 

(e) all consents, approvals and authorizations legally required to be 
obtained to consummate the Merger shall have been obtained from all         
Governmental Entities, except where the failure to obtain any such consent, 
approval or authorization could not reasonably be expected to result in a   
Parent Material Adverse Effect or a Company Material Adverse Effect;        

(f) there shall not be threatened, instituted or pending any action or
proceeding before any court or governmental authority or agency, domestic   
or foreign, (i) challenging or seeking to make illegal, or to delay or      
otherwise directly or indirectly to restrain or prohibit, the consummation  
of the transactions contemplated hereby, or seeking to obtain material      
damages in connection with the transactions contemplated hereby, (ii)       
seeking to prohibit direct or indirect ownership or operation by Parent of  
all or a material portion of the business and assets of the Company, or to  
Parent or to Company to dispose of or to hold separately all or a material  
portion of the business or assets of Parent or Company, as a result of the  
transactions contemplated hereby, (iii) seeking to invalidate or render     
unenforceable any material provision of this Agreement, the Agreement of    
Merger or any of the other agreements attached as Annexes hereto, or (iv)   
otherwise relating to and materially adversely affecting the transactions   
contemplated hereby;                                                        

 (g) each of the Parent, the Company and the Trustee shall have executed
and delivered a supplemental indenture, and all such other requirements as  
are provided for in the Indenture in connection with the Merger shall have  
been met;                                                                   

(h) each of the Parent and the Company shall have entered into such   
documents as shall be necessary to provide for the offering of the Exchange 
Notes on such terms as shall be satisfactory to the parties and shall       
otherwise have taken or caused to be taken all such actions as shall be     
required in connection therewith; and                                       

(i) the Parent Common Stock to be issued in the Merger shall have been
authorized for listing on the NNM, subject to notice of issuance.           

SECTION 8.02 Conditions to the Obligations of Company. The obligations of 
Company to consummate the Merger, or to permit the consummation of the Merger   
are subject to the satisfaction or, if permitted by applicable Law, waiver of   
the following further conditions:                                               

(a) The representations and warranties of Parent contained in this    
Agreement shall have been accurate in all material respects as of the date  
of this Agreement, and shall be accurate in all material respects as of the 
Effective Time as if made on and as of the Effective Time (other than       
representations and warranties which address matters only as of a certain   
date which shall be true and correct in all material respects as of such    
certain date) (it being understood that, for purposes of determining the    
accuracy of such representations and warranties, "Material Adverse Effect " 
qualifications and other materiality qualifications contained in such       
representations and warranties shall be disregarded);                       

(b) Parent shall have performed or complied in all material respects  
with all covenants required by this Agreement to be performed or complied   
with by it on or prior to the Effective Time;                               

 (c) The Company shall have been provided with a certificate executed by
(i) an authorized officer of Parent on behalf of Parent and (ii) each of    
the Parent's Chairman of the Board of Directors, the Parent's Chief         
Executive Officer and the Parent's Chief Accounting Officer, certifying     
that the condition set forth in Section 8.02(a) shall have been fulfilled,  
and a certificate executed by an authorized officer of Parent on behalf of  
Parent certifying that the conditions set forth in Section 8.02(b) shall    
have been fulfilled;                                                        

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  (d) The Parent shall have furnished to Company (i) copies of the text of
the resolutions by which the corporate action on the part of Parent         
necessary to approve this Agreement, the Agreement of Merger, the amended   
certificate of incorporation, the election of the directors listed on       
Schedule III, the adoption of the 2001 Plan and the transactions            
contemplated hereby and thereby were taken, (ii) a certificate dated as of  
the Effective Time executed on behalf of Parent by its corporate secretary  
or one of its assistant corporate secretaries certifying to the Company     
that such copies are true, correct and complete copies of such resolutions  
and that such resolutions were duly adopted and have not been amended or    
rescinded, (iii) an incumbency certificate dated as of the Effective Time   
executed on behalf of Parent by its corporate secretary or one of its       
assistant corporate secretaries certifying the signature and office of each 
officer of Parent executing this Agreement, the Agreement of Merger, the    
amended certificate of incorporation, or any other agreement, certificate   
or other instrument executed pursuant hereto, and (iv) a copy of the        
amended certificate of incorporation, certified by the Secretary of State   
of the State of Delaware, and a certificate of good standing from the       
Secretary of State of the State of Delaware, evidencing the good standing   
of Parent in such jurisdiction;                                             

(e) The Company shall have obtained an opinion from Company's legal   
counsel in form and substance reasonably satisfactory to it substantially   
to the effect that if the Merger is consummated in accordance with the      
provisions of this Agreement, under current law, for federal income tax     
purposes, the Merger will qualify as a reorganization within the meaning of 
Section 368(a) of the Code, provided, that if Company is unable to obtain   
such an opinion from its legal counsel, this condition shall be deemed to   
be satisfied if Parent's legal counsel delivers an opinion to Company to    
the same effect;                                                            

(f) The Surviving Corporation shall have been qualified for listing on
the NNM in accordance with the Rule 4330(f) of the NNM;                     

(g) The Reverse Stock Split shall have been approved by the Parent    
stockholders and shall be effective immediately prior to the Effective      
Time;                                                                       

(h) Each share of Company Preferred Stock outstanding prior to the    
Effective Time shall have been converted into shares of Company Common      
Stock;                                                                      

(i) The Amended and Restated Investors' Rights Agreement dated as of  
November 1, 1999, the Amended and Restated Right of First Refusal and Co-   
Sale Agreement dated as of October 21,1999 and the Amended and Restated     
Voting Agreement dated as of October 21, 1999 shall have been terminated;   

 (j) The Company shall have been furnished with evidence satisfactory to
it of the consent or approval of those persons whose consent or approval    
shall be required in connection with the Merger under any material contract 
of Parent or any of its Subsidiaries or otherwise, except where the failure 
to obtain such consent or approval would not have a Material Adverse Effect 
on Parent;                                                                  

(k) Each officer of Parent who is not designated to be an officer of  
Parent in accordance with subsection 2.05(b) shall have delivered a duly    
executed resignation from his or her position with Parent effective         
immediately after the Effective Time, and those persons listed on Schedule  
I hereto, shall have been elected as officers of Parent effective           
immediately after the Effective Time, to hold office until their successors 
are elected or appointed and qualified or until their resignation or        
removal;                                                                    

(l) Each director of Parent who is not designated to be a director of 
Parent in accordance with subsection 2.05(c) shall have delivered a duly    
executed resignation from his or her position with Parent effective         
immediately after the Effective Time, and those persons listed on Schedule  
II hereto, shall have been elected as directors of Parent effective         
immediately after the Effective Time, to hold office until their successors 
are elected or appointed and qualified or until their resignation or        
removal;                                                                    

(m) The board of directors of Parent and the Parent stockholders shall
have approved the certificate of amendment to the certificate of            
incorporation of the Parent to (1) change its name to Mayan Networks        
Corporation as of the Effective Time, (2) increase the Parent Common Stock  
in order to reserve a sufficient number of authorized but unissued Parent   
Common Stock for issuance in the Merger and upon                            

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exercise or conversion of the Company Rights, and the certificate shall     
have been filed with, and approved by, the Secretary of State of the State  
of Delaware and (3) effect the Reverse Stock Split of the Parent Common     
Stock;                                                                      

 (n) The 2001 Plan shall have been approved by the board of directors of
Parent and the Parent stockholders to be effective at the Effective Time;   

(o) Parent shall have obtained from each of the optionees listed on   
Schedule 7.13 (including all optionees with options issued under Parent's   
1995 Stock Option Plan), each of whom is holding a Parent Stock Option that 
has or may have any right to acceleration of vesting due to the Merger, a   
waiver of such right to acceleration;                                       

(p) Parent shall have prepared and filed a registration statement with
the SEC, which registration statement shall have been declared effective at 
the Effective Time, covering the resale of the Convertible Subordinated     
Promissory Notes, the Exchange Notes and the Underlying Conversion Shares;  

(q) Parent shall have maintained directors' and officers' liability   
insurance policies in amounts and with coverages equivalent to those in     
effect as of the date hereof;                                               

(r) No Parent Material Adverse Effect shall have occurred or shall be 
continuing since the date of this Agreement;                                

(s) The employees of Parent specifically identified on Schedule III   
shall have accepted employment with Company and shall have entered into     
employment agreements in the form attached hereto Annex C;                  

(t) Each Parent stockholder named in Schedule 7.08 shall have executed
and delivered to the Company a Market Standoff Agreement substantially in   
the form attached hereto as Annex D; and                                    

(u) Company shall have received a legal opinion from Parent's legal   
counsel, in the form attached hereto as Annex E.                            

SECTION 8.03 Conditions to the Obligations of Parent. The obligations of  
Parent to consummate the Merger are subject to the satisfaction or waiver of    
the following further conditions:                                               

(a) each of the representations and warranties of Company contained in
this Agreement shall have been accurate in all material respects as of the  
date of this Agreement, and shall be accurate in all material respects as   
of the Effective Time as if made on and as of the Effective Time (it being  
understood that, for purposes of determining the accuracy of such           
representations and warranties, "Material Adverse Effect " qualifications   
and other materiality qualifications contained in such representations and  
warranties shall be disregarded);                                           

(b) The Company shall have performed or complied in all material      
respects with all covenants required by this Agreement to be performed or   
complied with by it on or prior to the Effective Time;                      

(c) The Parent shall have been provided with a certificate executed on
behalf of Company by an authorized officer certifying that the conditions   
set forth in Section 8.03(a) and (b) shall have been fulfilled;             

  (d) The Company shall have furnished to Parent (i) copies of the text of
the resolutions by which the corporate action on the part of the Company    
necessary to approve this Agreement, the Agreement of Merger and the        
transactions contemplated hereby and thereby were taken, (ii) a certificate 
dated as of the Effective Time executed on behalf of Company by its         
corporate secretary or one of its assistant corporate secretaries           
certifying to the Parent that such copies are true, correct and complete    
copies of such resolutions and that such resolutions were duly adopted and  
have not been amended or rescinded, (iii) an incumbency certificate dated   
as of the Effective Time executed on behalf of Company by its corporate     
secretary or one of its assistant corporate secretaries certifying the      
signature and office of each officer of Company executing this Agreement,   
the Agreement of Merger, or any other agreement, certificate or other       

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instrument executed pursuant hereto, and (iv) certificates of good standing 
from the Secretary of State of the State of California, evidencing the good 
standing of the Company in such jurisdiction;                               

(e) The Parent shall have obtained an opinion from Parent's legal     
counsel in form and substance reasonably satisfactory to it substantially   
to the effect that if the Merger is consummated in accordance with the      
provisions of this Agreement, under current law, for federal income tax     
purposes, the Merger will qualify as a reorganization within the meaning of 
Section 368(a) of the Code, provided, that if Parent is unable to obtain    
such an opinion from its legal counsel, this condition shall be deemed to   
be satisfied if Company's legal counsel delivers an opinion to Parent to    
the same effect;                                                            

 (f) The Parent shall have been provided with a certification (a "FIRPTA
Certificate") issued by the Company pursuant to treasury Regulation Section 
1.897-2(h) that the stock of Company is not a "United States real property  
interest" as defined in Section 897 of the Code; and                        

 (g) Each Company shareholder named in Schedule 7.07 shall have executed
and delivered to Parent a Market Standoff Agreement substantially in the    
form attached hereto as Annex D.                                            

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER 

  SECTION 9.01 Termination. This Agreement may be terminated at any time prior
to the Effective Time by written notice received by the non-terminating party   
or parties from the terminating party or parties stating the basis for such     
termination and referring to the applicable clause of this Section 9.01,        
notwithstanding any requisite adoption and approval of this Agreement, as       
follows:                                                                        

  (a) by mutual written consent duly authorized by the boards of directors
of each of Parent and Company;                                              

(b) by either Parent or Company, if the Effective Time shall not have 
occurred on or before August 31, 2001; provided, however, that the right to 
terminate this Agreement under this Section 9.01 (b) shall not be available 
to any party whose failure to fulfill any obligation under this Agreement   
shall have caused, or resulted in, the failure of the Effective Time to     
occur on or before such date;                                               

(c) by either Parent or Company, if any Governmental Order, writ,     
injunction or decree preventing the consummation of the Merger shall have   
been entered by any court of competent jurisdiction and shall have become   
final and nonappealable;                                                    

(d) by Parent, in response to a Parent Superior Proposal which was not
solicited by Parent; provided that Parent shall have complied in all        
material respects with its obligations under Section 7.19 (no-solicitation) 
and such Parent Superior Proposal did not otherwise result from a breach of 
any of Parent's obligations under this Agreement; and provided further,     
that no termination pursuant to this Section 9.01 (d) shall be effective    
until after the fifth business day following Company's receipt of written   
notice advising Company that the board of directors of Parent is prepared   
to accept a Parent Superior Proposal, specifying the material terms and     
conditions of such Parent Superior Proposal and identifying the person      
making such Parent Superior Proposal; and the payment of any applicable     
termination fee pursuant to Section 9.05(b) and concurrently with such      
termination the fee specified in Section 9.05(b) shall have been paid to    
the Company;                                                                

(e) by Company, in response to a Company Superior Proposal; provided  
that such Company Superior Proposal did not otherwise result from a breach  
of any of Company's obligations under this Agreement; and provided further, 
that no termination pursuant to this Section 9.01(e) shall be effective     
until after the fifth business day following Parent's receipt of written    
notice advising Parent that the Board of Directors of Company is prepared   
to accept a Company Superior Proposal, specifying the material terms and    
conditions of such Company Superior Proposal and identifying the person     
making such Company Superior                                                

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Proposal; and the payment of any applicable termination fee pursuant to     
Section 9.05(c) and concurrently with such termination the fee specified in 
Section 9.05(c) shall have been paid to the Parent;                         

  (f) by the Parent, if this Agreement and the Merger is brought to a vote
and shall fail to receive the requisite votes for approval at the Company   
Shareholders' Meeting or any adjournment or postponement thereof;           

(g) by the Company, if the Parent Meeting Proposals shall fail to     
receive the requisite votes for approval at the Parent Stockholders'        
Meeting or any adjournment or postponement thereof;                         

  (h) by the Parent, twenty days after receipt by the Company of a written
notice from the Parent of a breach of any representation, warranty,         
covenant or agreement on the part of the Company set forth in this          
Agreement, or if any representation or warranty of the Company shall have   
become untrue, incomplete or incorrect, in either case such that the        
conditions set forth in Section 8.03 would not be satisfied (a "Terminating 
Company Breach"); provided, however, that if such Terminating Company       
Breach is cured by the Company within such twenty day period, the Parent    
may not terminate this Agreement under this Section 9.01(h);                

  (i) by the Company, twenty days after receipt by the Parent of a written
notice from the Company of a breach of any representation, warranty,        
covenant or agreement on the part of the Parent set forth in this           
Agreement, or if any representation or warranty of the Parent shall have    
become untrue, incomplete or incorrect, in either case such that the        
conditions set forth in Section 8.02 would not be satisfied (a "Terminating 
Parent Breach"); provided, however, that if such Terminating Parent Breach  
is cured by the Parent within such twenty day period, the Company may not   
terminate this Agreement under this Section 9.01(i); or                     

(j) by the Company, if (i) Parent Common Stock shall become delisted  
from NNM prior the Effective Time, (ii) the outstanding Common Stock of the 
Surviving Corporation does not qualify for listing on the NNM in accordance 
with Rule 4330(f) of the NNM or the application for the listing of shares   
of Common Stock to be issued in the Merger or (iii) the Surviving           
Corporation's initial listing application to the NNM shall have been        
denied.                                                                     

The right of any party hereto to terminate this Agreement pursuant to this      
Section 9.01 will remain operative and in full force and effect regardless of   
any investigation made by or on behalf of any party hereto, any Person          
controlling any such party or any of their respective officers, directors,      
representatives or agents, whether prior to or after the execution of this      
Agreement.                                                                      

 SECTION 9.02 Effect of Termination.  Except as provided in Section 9.05, in
the event of termination of this Agreement pursuant to Section 9.01, this       
Agreement shall forthwith become void, there shall be no liability under this   
Agreement on the part of any party hereto or any of its Affiliates or any of    
its or their officers or directors, and all rights and obligations of each      
party hereto shall cease; provided, however, that nothing herein shall relieve  
any party hereto from liability for the willful or intentional material breach  
of any of its representations and warranties or the willful or intentional      
material breach of any of its covenants or agreements set forth in this         
Agreement; and provided, further, that the provisions of Section 6.03, Section  
7.04, Section 9.05 and this Section 9.01 shall remain in full force and effect  
and survive any termination of this Agreement for a period of three years.      

 SECTION 9.03 Amendment. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective boards of directors at any  
time prior to the Effective Time; provided, however, that, after the approval   
of this Agreement by the shareholders of Company, no amendment may be made that 
changes the amount or type of consideration into which Company Common Stock     
will be converted pursuant to this Agreement. This Agreement may not be amended 
except by an instrument in writing signed by the parties hereto.                

SECTION 9.04 Waiver. At any time prior to the Effective Time, any party   
hereto may (a) extend the time for or waive compliance with the performance of  
any obligation or other act of any other party hereto,                          

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(b) waive any inaccuracy in the representations and warranties contained herein 
or in any document delivered pursuant hereto and (c) waive compliance by the    
other party with any of the agreements or conditions contained herein. Any such 
extension or waiver shall be valid if set forth in an instrument in writing     
signed by the party or parties to be bound thereby.                             

SECTION 9.05 Termination Fee; Expenses.                                   

(a) Except as otherwise set forth in Section 1.01 or in this Section  
9.05, all Expenses incurred in connection with this Agreement and the       
Merger shall be paid by the party incurring such Expenses, whether or not   
the Merger is consummated, except that Parent and Company each shall pay    
one-half of all Expenses incurred solely for printing and mailing the Joint 
Proxy Statement/Prospectus and any fees required to be paid under the HSR   
Act, if applicable.                                                         

(b) In the event that this Agreement shall be terminated by Parent    
pursuant to Section 9.01(d), then, in any such event, Parent shall          
reimburse the Company for all Expenses reasonably incurred by the Company   
in connection with this Agreement and the transactions contemplated hereby, 
which fee shall be due and payable in full upon termination of this         
Agreement. All payments pursuant to this Section 9.05                       
(b) shall be made by wire transfer of same-day funds to an account          
specified by the Company.                                                   

(c) In the event that this Agreement shall be terminated by Company   
pursuant to Section 9.01(e), then, in any such event, the Company shall     
reimburse Parent for all Expenses reasonably incurred by Parent in          
connection with this Agreement and the transactions contemplated hereby,    
which fee shall be due and payable in full upon termination of this         
Agreement. All payments pursuant to this Section 9.05(c) shall be made by   
wire transfer of same-day funds to an account specified by Parent.          

ARTICLE X 

GENERAL PROVISIONS

SECTION 10.01  Non-Survival of Representations and Warranties.  The       
representations and warranties in this Agreement shall terminate at the         
Effective Time or upon the termination of this Agreement pursuant to Section    
9.01, as the case may be. This Section 10.01 shall not limit any covenant or    
agreement of the parties which by its terms contemplates performance after the  
Effective Time.                                                                 

SECTION 10.02 Notices. All notices, requests, claims, demands and other   
communications hereunder shall be in writing and shall be given (and shall be   
deemed to have been duly given upon receipt) by delivery in Person, by telecopy 
or facsimile or by a nationally recognized courier service to the respective    
parties at the following addresses (or at such other address for a party as     
shall be specified in a notice given in accordance with this Section 10.02):    

(a) if to Company:                                                        

2115 O'Nel Drive                                                      
San Jose, CA 95131                                                    
Attention: John Tingleff, Chief Financial Officer                     
Facsimile: (408) 437-0181                                             

with a copy to:                                                       

Brobeck, Phleger & Harrison LLP                                       
Two Embarcadero Place                                                 
2200 Geng Road                                                        
Palo Alto, CA 94303                                                   
Attention: David Makarechian                                          
Facsimile: (650) 496-2715                                             

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(b) if to Parent:                                                         

2540 Route 130                                                        
Cranbury, NJ 08512                                                    
Attention: Dennis Schneider, President                                
Facsimile: 609-860-1674                                               

with a copy to:                                                       

Steptoe & Johnson LLP                                                 
1330 Connecticut Avenue, N.W.                                         
Washington, DC 20036, USA                                             
Attention: Howard Stahl                                               
Facsimile: 202 429 3902                                               

  SECTION 10.03 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Law or public 
policy, all other conditions and provisions of this Agreement shall             
nevertheless remain in full force and effect so long as the economic or legal   
substance of the Merger is not affected in any manner materially adverse to any 
party. Upon such determination that any term or other provision is invalid,     
illegal or incapable of being enforced, the parties hereto shall negotiate in   
good faith to modify this Agreement so as to effect the original intent of the  
parties as closely as possible in a mutually acceptable manner to the fullest   
extent permitted by applicable Law in order that the Merger may be consummated  
as originally contemplated to the fullest extent possible.                      

SECTION 10.04 Assignment; Binding Effect; Benefit. Neither this Agreement 
nor any of the rights, interests or obligations hereunder shall be assigned by  
any of the parties hereto (whether by operation of Law or otherwise) without    
the prior written consent of the other parties hereto. Subject to the preceding 
sentence, this Agreement shall be binding upon and shall inure to the benefit   
of the parties hereto and their respective successors and permitted assigns.    
Notwithstanding anything contained in this Agreement to the contrary, other     
than Section 7.04, nothing in this Agreement, expressed or implied, is intended 
to confer on any Person other than the parties hereto or their respective       
successors and permitted assigns any rights or remedies under or by reason of   
this Agreement.                                                                 

 SECTION 10.05 Incorporation of Annexes. The Parent Disclosure Schedule, the
Company Disclosure Schedule and all Annexes attached hereto and referred to     
herein are hereby incorporated herein and made a part of this Agreement for all 
purposes as if fully set forth herein. Parent and Company acknowledge that the  
Parent Disclosure Schedule and the Company Disclosure Schedule (i) are          
qualified in their entirety by reference to specific provisions of this         
Agreement and (ii) are not intended to constitute and shall not be construed as 
indicating that such matter is required to be disclosed, nor shall such         
disclosure be construed as an admission that such information is material with  
respect to Parent or Company, as the case may be, except to the extent required 
by this Agreement and by applicable law.                                        

SECTION 10.06 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND     
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA  
OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY 
LAW OTHER THAN THAT OF THE STATE OF CALIFORNIA.                                 

SECTION 10.07 Jurisdiction; Waiver of Jury Trial. Each party hereto       
irrevocably consents to the exclusive jurisdiction of any court located within  
the State of California, in connection with any matter based upon or arising    
out of this Agreement or the matters contemplated herein, agrees that process   
may be served upon them in any manner authorized by the laws of the State of    
California for such persons and waives and covenants not to assert or plead any 
objection which they might otherwise have to such jurisdiction and such         
process. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY 
IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT    

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OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED   
HEREBY OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION,   
PERFORMANCE OR ENFORCEMENT HEREOF.                                              

SECTION 10.08 Headings; Interpretation. The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not  
affect in any way the meaning or interpretation of this Agreement. The parties  
have participated jointly in the negotiation and drafting of this Agreement. In 
the event an ambiguity or question of intent or interpretation arises, this     
Agreement shall be construed as if drafted jointly by the parties, and no       
presumption or burden of proof shall arise favoring or disfavoring any party by 
virtue of the authorship of any provisions of this Agreement.                   

SECTION 10.09 Counterparts. This Agreement may be executed and delivered  
(including by facsimile transmission) in one or more counterparts, and by the   
different parties hereto in separate counterparts, each of which when executed  
and delivered shall be deemed to be an original but all of which taken together 
shall constitute one and the same agreement.                                    

SECTION 10.10 Entire Agreement. This Agreement (including the Annexes, the
Parent Disclosure Schedule and the Company Disclosure Schedule) and the         
Confidentiality Agreement constitute the entire agreement among the parties     
with respect to the subject matter hereof and supersede all prior agreements    
and understandings among the parties with respect thereto.                      

  IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective officers     
thereunto duly authorized.                                                      

                     ARIEL CORPORATION

                                         /s/ Dennis I. Schneider
                                         By: _________________________________
                             Name: Dennis I. Schneider
                          Title: CEO & President

                              MAYAN NETWORKS CORPORATION

                                         /s/ John Tingleff
                                         By: _________________________________
                       Name: John Tingleff
              Title: CFO

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SCHEDULE I

OFFICERS OF THE SURVIVING CORPORATION 

                                                                [Download Table]

Name of Officer          Title                                
---------------          -----                                
                                                              
Esmond Goei............. Chief Executive Officer and Chairman 
Dan Gatti............... President                            
John Tingleff........... Chief Financial Officer and Secretary
Dennis Schneider........ Senior Vice President--Marketing     

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SCHEDULE II 

DIRECTORS OF THE SURVIVING CORPORATION

Anthony Agnello 
Thomas Edrington
Esmond Goei 
Steven Krausz 
James Mongiello 
Peter Morris

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SCHEDULE III

KEY EMPLOYEES 

Carlos Borgialli
Gene Corrado
David During
Don Elwell
Richard Flocco
Nathan Guedalia 
Ken Kristiansan 
Jack Loprete
Bonne Mullen
Aziz Mzili
Arthur Naseef 
Johnny Viera

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                                                                     APPENDIX II

PARENT VOTING AGREEMENT 

 This PARENT VOTING AGREEMENT (this "Agreement") is made and entered into as
of March   , 2001 between Mayan Networks Corporation, a California corporation  
("Company" or "M-Co"), and the undersigned stockholders (each a "Stockholder"   
and collectively the "Stockholders") of Ariel Corporation, a Delaware           
corporation ("Parent"). Capitalized terms used and not otherwise defined herein 
shall have the respective meanings set forth in the Merger Agreement described  
below.                                                                          

RECITALS

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March   ,
2001 between Parent and Company (such agreement as it may be amended is         
hereinafter referred to as the "Merger Agreement"), the Company will be merged  
with and into Parent and the shareholders of the Company will receive shares of 
Parent Common Stock as set forth in the Merger Agreement (the "Merger");        

WHEREAS, in order to induce the Company to enter into the Merger Agreement
and consummate the Merger, Parent has agreed to use its reasonable efforts to   
cause certain stockholders of Parent to execute and deliver to the Company a    
Voting Agreement upon the terms set forth herein; and                           

WHEREAS, each Stockholder is the owner of the number of shares of the     
capital stock of Parent indicated on the signature page of this Parent Voting   
Agreement (the "Shares").                                                       

NOW, THEREFORE, the parties agree as follows:                             

1. Agreement to Retain Shares.                                            

1.1. Transfer and Encumbrance. Each Stockholder represents and warrants to
the Company that (i) such Stockholder is a record or beneficial owner of the    
Shares, with power to vote the Shares or cause the Shares to be voted and,      
except as otherwise set forth on the signature page hereto, Stockholder (A) has 
held such Shares at all times since the date set forth on such signature page,  
and (B) did not acquire any Shares in contemplation of the Merger; (ii) the     
Shares set forth on the signature page hereto constitute such Stockholder's     
entire interest in the outstanding capital stock and voting securities of       
Parent, other than Shares that are subject to employee stock options; (iii) no  
other person or entity not a signatory to this Agreement has a beneficial       
interest in or a right to acquire such Shares or any portion of such Shares;    
(iv) the Shares are and will be at all times up until the Expiration Date (as   
hereinafter defined) free and clear of any liens, claims, options, charges or   
other encumbrances; and (v) such Stockholder's address is accurately set forth  
on the signature page hereto.                                                   

  1.2. New Shares. Each Stockholder agrees that any shares of capital stock or
voting securities of Parent ("New Shares") that such Stockholder purchases or   
with respect to which Stockholder otherwise acquires beneficial ownership after 
the date of this Agreement and prior to the Expiration Date shall be subject to 
the terms and conditions of this Agreement to the same extent as if they        
constituted Shares. As used herein, the term "Expiration Date" shall mean the   
earlier to occur of (i) the Effective Time or (ii) termination of the Merger    
Agreement in accordance with the terms thereof.                                 

2. Agreement to Vote Shares and Take Certain Other Action. Prior to the   
Expiration Date, at every meeting of the stockholders of Parent at which any of 
the following matters is considered or voted upon, and at every adjournment or  
postponement thereof, and on every action or approval by written consent of the 
stockholders of Parent with respect to any of the following matters, each       
Stockholder shall vote the Shares and any New Shares: (a) in favor of approval  
of the issuance of shares of Parent Common Stock pursuant to the Merger         
Agreement, adoption of the Merger Agreement and the terms thereof, and each of  
the other transactions contemplated by the Merger Agreement, and any matter     
which would, or could reasonably be expected to, facilitate the Merger and each 
of the transactions contemplated by the Merger Agreement; (b) against approval  
of any proposal made in opposition to or competition with consummation of the   
Merger and the Merger                                                           

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Agreement; (c) against any merger, consolidation or other business combination  
of Parent with, sale of assets or stock of Parent to, or reorganization or      
recapitalization involving Parent, other than as contemplated or permitted by   
the Merger Agreement; (d) against any amendment to the certificate of           
incorporation of Parent that relates to the issuance of additional shares of    
Parent Common Stock in connection with any financing; (e) against any           
liquidation, or winding up of Parent; and (f) against any other proposal or     
action which would, or could reasonably be expected to, prohibit or discourage  
the Merger, including any amendment of the certificate of incorporation or      
bylaws of Parent not previously contemplated under the Merger Agreement which   
would dilute in any material respect the benefits to the Company of the Merger  
or change in any manner the voting rights of any shares of Parent Capital       
Stock.                                                                          

Prior to the Expiration Date, each Stockholder, as the holder of voting   
stock of Parent, shall be present, in person or by proxy at all meetings of     
stockholders of Parent at which any matter referred to in this Section 2 is to  
be voted upon so that all Shares and New Shares are counted for the purposes of 
determining the presence of a quorum at such meetings.                          

This Parent Voting Agreement is intended to bind Stockholder only with    
respect to the specific matters set forth herein, and shall not prohibit        
Stockholder from acting in accordance with Stockholder's fiduciary duties as an 
officer or director of Parent.                                                  

3. Irrevocable Proxy. Each Stockholder hereby agrees to timely deliver to 
the Company a duly executed proxy in the form attached hereto as Annex A (the   
"Proxy"), such Proxy to cover the issued and outstanding Shares and all issued  
and outstanding New Shares in respect of which such Stockholder is the record   
holder and is entitled to vote at each meeting of the stockholders of Parent    
(including, without limitation, each written consent in lieu of a meeting)      
prior to the Expiration Date. In the event that any Stockholder is unable to    
provide any such Proxy in a timely manner, such Stockholder hereby grants the   
Company a power of attorney to execute and deliver such Proxy for and on behalf 
of such Stockholder, such power of attorney, which being coupled with an        
interest, shall survive any death, disability, bankruptcy, or any other such    
impediment of such Stockholder. Upon the execution of this Agreement by each    
Stockholder, such Stockholder hereby revokes any and all prior proxies or       
powers of attorney given by such Stockholder with respect to voting of the      
Shares on the matters referred to in Section 2 and agrees not to (a) grant any  
subsequent proxies or powers of attorney with respect to the voting of the      
Shares, (b) deposit any of the Shares into a voting trust, or (c) enter into a  
voting agreement with respect to any of the Shares, until after the Expiration  
Date.                                                                           

4. Representations, Warranties and Covenants of Stockholder. Each         
Stockholder hereby represents, warrants and covenants to the Company as         
follows:                                                                        

(a) Such Stockholder has full power and legal capacity to execute and 
deliver this Agreement and to perform his or her obligations hereunder.     
This Agreement has been duly and validly executed and delivered by such     
Stockholder and constitutes the valid and binding obligation of such        
Stockholder, enforceable against such Stockholder in accordance with its    
terms, except as may be limited by (i) the effect of bankruptcy,            
insolvency, conservatorship, arrangement, moratorium or other laws          
affecting or relating to the rights of creditors generally, or (ii) the     
rules governing the availability of specific performance, injunctive relief 
or other equitable remedies and general principles of equity, regardless of 
whether considered in a proceeding in equity or at law. The execution and   
delivery of this Agreement by such Stockholder does not, and the            
performance of such Stockholder's obligations hereunder will not, result in 
any breach of or constitute a default (or an event that with notice or      
lapse of time or both would become a default) under, or give to others any  
right to terminate, amend, accelerate or cancel any right or obligation     
under, or result in the creation of any lien or encumbrance on any Shares   
or New Shares pursuant to, any note, bond, mortgage, indenture, contract,   
agreement, lease, license, permit, franchise or other instrument or         
obligation to which such Stockholder is a party or by which such            
Stockholder or the Shares or New Shares are or will be bound or affected.   

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(b) Such Stockholder agrees not to transfer, sell, exchange, pledge or
otherwise dispose of or encumber any of the Shares, or make any offer or    
agreement relating thereto, at any time prior to the Expiration Date other  
than to a transferee that agrees to be bound by the terms of this voting    
agreement and the proxy attached hereto. Each Stockholder understands and   
agrees that if such Stockholder attempts to transfer, vote or provide any   
other person with the authority to vote any of the Shares other than in     
compliance with this Agreement, Parent shall not, and each Stockholder      
hereby unconditionally and irrevocably instructs Parent to not, permit any  
such transfer on its books and records, issue a new certificate             
representing any of the Shares or record such vote unless and until such    
Stockholder shall have complied with the terms of this Agreement.           

  (c) Such Stockholder waives, as of the Effective Time, any claims it may
have in its capacity as a stockholder and has no knowledge of any pending   
or threatened claims against the Parent by any other security holder of the 
Parent.                                                                     

(d) Until the Expiration Date, such Stockholder will not (and will use
all requisite reasonable efforts to cause Parent, its affiliates, officers, 
directors and employees and any investment banker, attorney, accountant or  
other agent retained by such Stockholder or them, not to): (i) solicit,     
initiate, encourage or take any other action to facilitate directly or      
indirectly, any proposal, plan or offer to acquire all or any part of the   
business, assets, capital stock or other securities of Parent, whether by   
merger, purchase of assets, purchase of stock or other securities,          
exclusive license, joint venture, or otherwise, or to liquidate Parent or   
otherwise distribute to the Stockholders of Parent all or any substantial   
part of the business, properties or capital stock of Parent (each, an       
"Opposing Proposal"); (ii) initiate, directly or indirectly, any contact    
with any person in an effort to or with a view towards soliciting any       
Opposing Proposal; (iii) furnish information concerning Parent's business,  
properties or assets to any corporation, partnership, person or other       
entity or group (other than the Company, or any associate, agent or         
representative of the Company) under any circumstances that could           
reasonably be expected to relate to an actual or potential Opposing         
Proposal; (iv) negotiate or enter into discussions or any agreement,        
directly or indirectly, with any entity or group with respect to any        
potential Opposing Proposal; or (v) otherwise cooperate in any way with, or 
assist or participate in any effort or attempt by any person with respect   
to, any Opposing Proposal. In the event Stockholder shall receive or become 
aware of any Opposing Proposal subsequent to the date hereof, Stockholder   
shall promptly inform the Company as to any such matter and the details     
thereof to the extent possible without breaching any other agreement to     
which Stockholder is a party or violating its fiduciary duties.             

(e) Stockholder agrees not to take any action that would make any     
representation or warranty contained herein untrue or incorrect or have the 
effect of impairing the ability of Stockholder to perform its obligations   
under this Agreement or preventing or delaying the consummation of any of   
the transactions contemplated hereby.                                       

5. Additional Documents. Each Stockholder hereby covenants and agrees to  
execute and deliver any additional documents necessary or desirable, in the     
reasonable opinion of the Company, to carry out the purpose and intent of this  
Agreement.                                                                      

  6. Consent and Waiver. Each Stockholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Merger under the terms 
of any agreement to which such Stockholder is a party or pursuant to any rights 
such Stockholder may have provided, however, that such Stockholder shall not be 
required by this Section 6 to give any consent or waiver in his or her capacity 
as a director or officer of Parent.                                             

7. Termination. This Agreement and the Proxy delivered in connection      
herewith and all obligations of each Stockholder hereunder and thereunder,      
shall terminate and shall have no further force or effect as of the Expiration  
Date.                                                                           

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8. Miscellaneous.                                                         

8.1. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or   
unenforceable, then the remainder of the terms, provisions, covenants and       
restrictions of this Agreement shall remain in full force and effect and shall  
in no way be affected, impaired or invalidated.                                 

  8.2. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and 
their respective successors and permitted assigns, but, except as otherwise     
specifically provided herein, neither this Agreement nor any of the rights,     
interests or obligations of the parties hereto may be assigned by either of the 
parties without the prior written consent of the other. This Agreement is       
intended to bind each Stockholder solely as a securityholder of Parent only     
with respect to the specific matters set forth herein.                          

8.3. Amendment and Modification. This Agreement may not be modified,      
amended, altered or supplemented except by the execution and delivery of a      
written agreement executed by the parties hereto.                               

  8.4. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that the Company will be irreparably harmed and that there will be no adequate  
remedy at law for a violation of any of the covenants or agreements of each     
Stockholder set forth herein. Therefore, it is agreed that, in addition to any  
other remedies that may be available to the Company upon any such violation,    
the Company shall have the right to enforce such covenants and agreements by    
specific performance, injunctive relief or by any other means available to the  
Company at law or in equity and each Stockholder hereby waives any and all      
defenses which could exist in its favor in connection with such enforcement and 
waives any requirement for the security or posting of any bond in connection    
with such enforcement.                                                          

8.5. Notices. All notices, requests, demands or other communications that 
are required or may be given pursuant to the terms of this Agreement shall be   
in writing and shall be deemed to have been duly given (a) when delivered, if   
delivered by hand, (b) one business day after transmitted, if transmitted by a  
nationally recognized overnight courier service, (c) when telecopied, if        
telecopied (which is confirmed), or (d) three business days after mailing, if   
mailed by registered or certified mail (return receipt requested), to the       
parties at the following addresses:                                             

(a) If to any Stockholder, at the address set forth below such        
Stockholder's signature at the end hereof.                                  

(b) if to Company, to:                                                

MAYAN NETWORKS CORPORATION                                        
2115 O'Nel Drive                                                  
San Jose, CA 95131                                                
Attention: John Tingleff                                          
Facsimile No.: (408) 437-0181                                     

with a copy to:                                                   

Brobeck, Phleger & Harrison LLP                                   
Two Embarcadero Place                                             
2200 Geng Road                                                    
Palo Alto, CA 94303                                               
Attention: David Makarechian                                      
Facsimile No.: (650) 496-2715                                     

or to such other address as any party hereto may designate for itself by    
notice given as herein provided.                                            

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8.6. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California without giving 
effect to the principles of conflicts or choice of law rules of any             
jurisdiction.                                                                   

8.7. Entire Agreement. This Agreement and the Proxy contain the entire    
understanding of the parties in respect of the subject matter hereof, and       
supersede all prior negotiations and understandings between the parties with    
respect to such subject matter.                                                 

8.8. Counterpart. This Agreement may be executed in several counterparts, 
each of which shall be an original, but all of which together shall constitute  
one and the same agreement.                                                     

8.9. Effect of Headings. The section headings herein are for convenience  
only and shall not affect the construction or interpretation of this Agreement. 

[Signature Page Follows]

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  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the date first above written.                                                

M-CO                                      STOCKHOLDER                           

By: _________________________________     _____________________________________ 
                                         (Signature)

Name: _______________________________                                           

                                         _____________________________________

Title: ______________________________          (Print Name of Stockholder)      

                                         _____________________________________
                                        (Print Street Address)

                                         _____________________________________
                                         (Print City, State and Zip)

                                         _____________________________________
                                        (Print Telephone Number)

                                    Total Number of Shares of Parent
                                      Common Stock owned directly on the
                date hereof:

                                         Common Stock: _______________________

[Signature Page to Irrevocable Proxy] 

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                                                                         ANNEX A

IRREVOCABLE PROXY 
TO VOTE STOCK OF
ARIEL CORPORATION 

The undersigned stockholder of Ariel Corporation, a Delaware corporation  
("Parent"), hereby irrevocably appoints the members of the Board of Directors   
of Mayan Networks Corporation, a California corporation ("Company"), and each   
of them, or any other designee of the Company, as the sole and exclusive        
attorneys and proxies of the undersigned, with full power of substitution and   
resubstitution, to vote and exercise all voting rights (to the full extent that 
the undersigned is entitled to do so) with respect to all of the issued and     
outstanding shares of capital stock of Parent that now are owned of record by   
the undersigned, (collectively, the "Shares") in accordance with the terms of   
this Irrevocable Proxy. The Shares owned of record by the undersigned           
stockholder of Parent as of the date of this Irrevocable Proxy are listed on    
the final page of this Irrevocable Proxy. Upon the undersigned's execution of   
this Irrevocable Proxy, any and all prior proxies given by the undersigned with 
respect to the voting of any Shares are hereby revoked and the undersigned      
agrees not to grant any subsequent proxies with respect to such Shares until    
after the Expiration Date (as defined below).                                   

This Irrevocable Proxy is irrevocable (to the fullest extent permitted by 
California law), is coupled with an interest, and is granted in consideration   
of the Company entering into that certain Agreement and Plan of Merger (the     
"Merger Agreement") by and between Parent and the Company, which Merger         
Agreement provides for the merger of the Company with and into Parent (the      
"Merger"). As used herein, the term "Expiration Date" shall mean the earlier to 
occur of (i) such date and time as the Merger shall become effective in         
accordance with the terms and provisions of the Merger Agreement, and (ii) the  
date of termination of the Merger Agreement.                                    

The attorneys and proxies named above, and each of them are hereby        
authorized and empowered by the undersigned, at any time prior to the           
Expiration Date, to act as the undersigned's attorney and proxy to vote the     
Shares, and to exercise all voting rights of the undersigned with respect to    
the Shares (including, without limitation, the power to execute and deliver     
written consents), at every annual, special or adjourned meeting of the         
stockholders of Parent and in every written consent in lieu of such meeting:    
(a) in favor of adoption of the Merger Agreement and the terms thereof, and     
each of the other transactions contemplated by the Merger Agreement, and any    
matter which would, or could reasonably be expected to, facilitate the Merger;  
(b) against approval of any proposal made in opposition to or competition with  
consummation of the Merger and the Merger Agreement; (c) against any merger,    
consolidation or other business combination of Parent with, sale of assets or   
stock of Parent to, or reorganization or recapitalization involving Parent,     
other than as contemplated or permitted by the Merger Agreement; (d) against    
any liquidation, or winding up of Parent; and (e) against any other proposal or 
action which would, or could reasonably be expected to, prohibit or discourage  
the Merger, including any amendment of the certificate of incorporation or      
bylaws of Parent not previously contemplated under the Merger Agreement which   
would dilute in any material respect the benefits to the Company of the Merger  
or change in any manner the voting rights of any shares of Parent Capital       
Stock.                                                                          

The attorneys and proxies named above may not exercise this Irrevocable   
Proxy on any other matter except as provided above. The undersigned stockholder 
may vote the Shares on all other matters.                                       

 All authority herein conferred shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding    
upon the heirs, personal representatives, successors and assigns of the         
undersigned.                                                                    

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This Irrevocable Proxy is coupled with an interest as aforesaid and is    
irrevocable.                                                                    

Dated:       , 2001                                                             
                                         _____________________________________
                              (Signature of Stockholder)

                                         _____________________________________
                               (Print Name of Stockholder)

                                         _____________________________________
                           Shares owned of record:

                                         ___________________________ shares of
                       Parent Common Stock

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                                                                    APPENDIX III

COMPANY VOTING AGREEMENT

  This COMPANY VOTING AGREEMENT (this "Agreement") is made and entered into as
of March   , 2001 between Ariel Corporation, a Delaware corporation ("Parent"   
or "Mermaid"), and the undersigned shareholders (each a "Shareholder" and       
collectively the "Shareholders") of Mayan Networks Corporation, a California    
corporation ("Company"). Capitalized terms used and not otherwise defined       
herein shall have the respective meanings set forth in the Merger Agreement     
described below.                                                                

RECITALS

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March ,  
2001 between Parent and Company (such agreement as it may be amended is         
hereinafter referred to as the "Merger Agreement"), the Company will be merged  
with and into Parent and the shareholders of the Company will receive shares of 
Parent Common Stock as set forth in the Merger Agreement (the "Merger");        

WHEREAS, in order to induce Parent to enter into the Merger Agreement and 
consummate the Merger, the Company has agreed to use its reasonable efforts to  
cause certain shareholders of the Company to execute and deliver to Parent a    
Voting Agreement upon the terms set forth herein; and                           

WHEREAS, each Shareholder is the owner of the number of shares of the     
capital stock of the Company indicated on the signature page of this Company    
Voting Agreement (the "Shares").                                                

NOW, THEREFORE, the parties agree as follows:                             

1. Agreement to Retain Shares.                                            

1.1. Transfer and Encumbrance. Each Shareholder represents and warrants to
Parent that (i) such Shareholder is a record or beneficial owner of the Shares, 
with power to vote the Shares or cause the Shares to be voted and, except as    
otherwise set forth on the signature page hereto, Shareholder (A) has held such 
Shares at all times since the date set forth on such signature page, and (B)    
did not acquire any Shares in contemplation of the Merger; (ii) the Shares set  
forth on the signature page hereto constitute such Shareholder's entire         
interest in the outstanding capital stock and voting securities of the Company, 
other than Shares that are subject to employee stock options; (iii) no other    
person or entity not a signatory to this Agreement has a beneficial interest in 
or a right to acquire such Shares or any portion of such Shares; (iv) the       
Shares are and will be at all times up until the Expiration Date (as            
hereinafter defined) free and clear of any liens, claims, options, charges or   
other encumbrances; and (v) such Shareholder's address is accurately set forth  
on the signature page hereto.                                                   

  1.2. New Shares. Each Shareholder agrees that any shares of capital stock or
voting securities of the Company ("New Shares") that such Shareholder purchases 
or with respect to which Shareholder otherwise acquires beneficial ownership    
after the date of this Agreement and prior to the Expiration Date shall be      
subject to the terms and conditions of this Agreement to the same extent as if  
they constituted Shares. As used herein, the term "Expiration Date" shall mean  
the earlier to occur of (i) the Effective Time or (ii) termination of the       
Merger Agreement in accordance with the terms thereof.                          

2. Agreement to Vote Shares and Take Certain Other Action. Prior to the   
Expiration Date, at every meeting of the shareholders of the Company at which   
any of the following matters is considered or voted upon, and at every          
adjournment or postponement thereof, and on every action or approval by written 
consent of the shareholders of the Company with respect to any of the following 
matters, each Shareholder shall vote the Shares and any New Shares: (a) in      
favor of adoption of the Merger Agreement and the terms thereof, and each of    
the other transactions contemplated by the Merger Agreement, and any matter     
which would, or could reasonably be expected to, facilitate the Merger and each 
of the transactions contemplated by the Merger Agreement; (b) against approval  
of any proposal made in opposition to or competition with consummation of the   
Merger and the Merger Agreement; (c) against any merger, consolidation or other 
business combination of                                                         

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the Company with, sale of assets or stock of the Company to, or reorganization  
or recapitalization involving the Company, other than as contemplated or        
permitted by the Merger Agreement; (d) against any amendment to the articles of 
incorporation of the Company that relates to the issuance of additional shares  
of Company Common Stock in connection with any financing; (e) against any       
liquidation, or winding up of the Company; and (f) against any other proposal   
or action which would, or could reasonably be expected to, prohibit or          
discourage the Merger, including any amendment of the articles of incorporation 
or bylaws of the Company not previously contemplated under the Merger Agreement 
which would dilute in any material respect the benefits to Parent of the Merger 
or change in any manner the voting rights of any shares of Parent Capital       
Stock.                                                                          

Prior to the Expiration Date, each Shareholder, as the holder of voting   
stock of the Company, shall be present, in person or by proxy at all meetings   
of shareholders of the Company at which any matter referred to in this Section  
2 is to be voted upon so that all Shares and New Shares are counted for the     
purposes of determining the presence of a quorum at such meetings.              

This Company Voting Agreement is intended to bind Shareholder only with   
respect to the specific matters set forth herein, and shall not prohibit        
Shareholder from acting in accordance with Shareholder's fiduciary duties as an 
officer or director of the Company.                                             

3. Irrevocable Proxy. Each Shareholder hereby agrees to timely deliver to 
Parent a duly executed proxy in the form attached hereto as Annex A (the        
"Proxy"), such Proxy to cover the issued and outstanding Shares and all issued  
and outstanding New Shares in respect of which such Shareholder is the record   
holder and is entitled to vote at each meeting of the shareholders of the       
Company (including, without limitation, each written consent in lieu of a       
meeting) prior to the Expiration Date. In the event that any Shareholder is     
unable to provide any such Proxy in a timely manner, such Shareholder hereby    
grants Parent a power of attorney to execute and deliver such Proxy for and on  
behalf of such Shareholder, such power of attorney, which being coupled with an 
interest, shall survive any death, disability, bankruptcy, or any other such    
impediment of such Shareholder. Upon the execution of this Agreement by each    
Shareholder, such Shareholder hereby revokes any and all prior proxies or       
powers of attorney given by such Shareholder with respect to voting of the      
Shares on the matters referred to in Section 2 and agrees not to (a) grant any  
subsequent proxies or powers of attorney with respect to the voting of the      
Shares, (b) deposit any of the Shares into a voting trust, or (c) enter into a  
voting agreement with respect to any of the Shares, until after the Expiration  
Date.                                                                           

4. Representations, Warranties and Covenants of Shareholder. Each         
Shareholder hereby represents, warrants and covenants to Parent as follows:     

(a) Such Shareholder has full power and legal capacity to execute and 
deliver this Agreement and to perform his or her obligations hereunder.     
This Agreement has been duly and validly executed and delivered by such     
Shareholder and constitutes the valid and binding obligation of such        
Shareholder, enforceable against such Shareholder in accordance with its    
terms, except as may be limited by (i) the effect of bankruptcy,            
insolvency, conservatorship, arrangement, moratorium or other laws          
affecting or relating to the rights of creditors generally, or (ii) the     
rules governing the availability of specific performance, injunctive relief 
or other equitable remedies and general principles of equity, regardless of 
whether considered in a proceeding in equity or at law. The execution and   
delivery of this Agreement by such Shareholder does not, and the            
performance of such Shareholder's obligations hereunder will not, result in 
any breach of or constitute a default (or an event that with notice or      
lapse of time or both would become a default) under, or give to others any  
right to terminate, amend, accelerate or cancel any right or obligation     
under, or result in the creation of any lien or encumbrance on any Shares   
or New Shares pursuant to, any note, bond, mortgage, indenture, contract,   
agreement, lease, license, permit, franchise or other instrument or         
obligation to which such Shareholder is a party or by which such            
Shareholder or the Shares or New Shares are or will be bound or affected.   

(b) Such Shareholder agrees not to transfer, sell, exchange, pledge or
otherwise dispose of or encumber any of the Shares, or make any offer or    
agreement relating thereto, at any time prior to the Expiration Date other  
than to a transferee that agrees to be bound by the terms of this voting    
agreement                                                                   

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and the proxy attached hereto. Each Shareholder understands and agrees that 
if such Shareholder attempts to transfer, vote or provide any other person  
with the authority to vote any of the Shares other than in compliance with  
this Agreement, the Company shall not, and each Shareholder hereby          
unconditionally and irrevocably instructs the Company to not, permit any    
such transfer on its books and records, issue a new certificate             
representing any of the Shares or record such vote unless and until such    
Shareholder shall have complied with the terms of this Agreement.           

  (c) Such Shareholder waives, as of the Effective Time, any claims it may
have in its capacity as a shareholder and has no knowledge of any pending   
or threatened claims against the Company by any other security holder of    
the Company.                                                                

(d) Shareholder agrees not to take any action that would make any     
representation or warranty contained herein untrue or incorrect or have the 
effect of impairing the ability of Shareholder to perform its obligations   
under this Agreement or preventing or delaying the consummation of any of   
the transactions contemplated hereby.                                       

5. Additional Documents. Each Shareholder hereby covenants and agrees to  
execute and deliver any additional documents necessary or desirable, in the     
reasonable opinion of Parent, to carry out the purpose and intent of this       
Agreement.                                                                      

  6. Consent and Waiver. Each Shareholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Merger under the terms 
of any agreement to which such Shareholder is a party or pursuant to any rights 
such Shareholder may have, provided, however, that such Shareholder shall not   
be required by this Section 6 to give any consent or waiver in his or her       
capacity as a director or officer of the Company.                               

7. Termination. This Agreement and the Proxy delivered in connection      
herewith and all obligations of each Shareholder hereunder and thereunder,      
shall terminate and shall have no further force or effect as of the Expiration  
Date.                                                                           

8. Miscellaneous.                                                         

8.1. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or   
unenforceable, then the remainder of the terms, provisions, covenants and       
restrictions of this Agreement shall remain in full force and effect and shall  
in no way be affected, impaired or invalidated.                                 

  8.2. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and 
their respective successors and permitted assigns, but, except as otherwise     
specifically provided herein, neither this Agreement nor any of the rights,     
interests or obligations of the parties hereto may be assigned by either of the 
parties without the prior written consent of the other. This Agreement is       
intended to bind each Shareholder solely as a securityholder of the Company     
only with respect to the specific matters set forth herein.                     

8.3. Amendment and Modification. This Agreement may not be modified,      
amended, altered or supplemented except by the execution and delivery of a      
written agreement executed by the parties hereto.                               

  8.4. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that Parent will be irreparably harmed and that there will be no adequate       
remedy at law for a violation of any of the covenants or agreements of each     
Shareholder set forth herein. Therefore, it is agreed that, in addition to any  
other remedies that may be available to Parent upon any such violation, Parent  
shall have the right to enforce such covenants and agreements by specific       
performance, injunctive relief or by any other means available to Parent at law 
or in equity and each Shareholder hereby waives any and all defenses which      
could exist in its favor in connection with such enforcement and waives any     
requirement for the security or posting of any bond in connection with such     
enforcement.                                                                    

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8.5. Notices. All notices, requests, demands or other communications that 
are required or may be given pursuant to the terms of this Agreement shall be   
in writing and shall be deemed to have been duly given (a) when delivered, if   
delivered by hand, (b) one business day after transmitted, if transmitted by a  
nationally recognized overnight courier service, (c) when telecopied, if        
telecopied (which is confirmed), or (d) three business days after mailing, if   
mailed by registered or certified mail (return receipt requested), to the       
parties at the following addresses:                                             

(a) If to any Shareholder, at the address set forth below such        
Shareholder's signature at the end hereof.                                  

(b) if to Parent, to:                                                 

Ariel Corporation                                                 
2540 Route 130                                                    
Cranbury, NJ 08512                                                
Attention: Dennis Schneider, President                            
Facsimile No.: (609) 860-1674                                     

with a copy to:                                                   

Steptoe & Johnson LLP                                             
1330 Connecticut Avenue, N.W.                                     
Washington, D.C. 20036                                            
Attention: Howard Stahl                                           
Facsimile No.: (202) 429-3902                                     

or to such other address as any party hereto may designate for itself by notice 
given as herein provided.                                                       

8.6. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California without giving 
effect to the principles of conflicts or choice of law rules of any             
jurisdiction.                                                                   

8.7. Entire Agreement. This Agreement and the Proxy contain the entire    
understanding of the parties in respect of the subject matter hereof, and       
supersede all prior negotiations and understandings between the parties with    
respect to such subject matter.                                                 

8.8. Counterpart. This Agreement may be executed in several counterparts, 
each of which shall be an original, but all of which together shall constitute  
one and the same agreement.                                                     

8.9. Effect of Headings. The section headings herein are for convenience  
only and shall not affect the construction or interpretation of this Agreement. 

[Signature Page Follows]

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  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the date first above written.                                                

               SHAREHOLDER
ARIEL                                                                           

                                         _____________________________________
By: _________________________________     (Signature)                           
Name: _______________________________                                           

Title: ______________________________     _____________________________________ 

                               (Print Name of Shareholder)

                                         _____________________________________
                          (Print Street Address)

                                         _____________________________________
                               (Print City, State and Zip)

                                         _____________________________________
                            (Print Telephone Number)

Total Number of Shares of Company Common Stock owned directly on the date       
hereof:                                                                         

Common Stock: _______________________                                           

[Signature Page to Irrevocable Proxy] 

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                                                                         ANNEX A

IRREVOCABLE PROXY 
TO VOTE STOCK OF
MAYAN NETWORKS CORPORATION

The undersigned shareholder of Mayan Networks Corporation, a California   
corporation ("Company"), hereby irrevocably appoints the members of the Board   
of Directors of Ariel Corporation, a Delaware corporation ("Parent"), and each  
of them, or any other designee of Parent, as the sole and exclusive attorneys   
and proxies of the undersigned, with full power of substitution and             
resubstitution, to vote and exercise all voting rights (to the full extent that 
the undersigned is entitled to do so) with respect to all of the issued and     
outstanding shares of capital stock of the Company that now are owned of record 
by the undersigned, (collectively, the "Shares") in accordance with the terms   
of this Irrevocable Proxy. The Shares owned of record by the undersigned        
shareholder of the Company as of the date of this Irrevocable Proxy are listed  
on the final page of this Irrevocable Proxy. Upon the undersigned's execution   
of this Irrevocable Proxy, any and all prior proxies given by the undersigned   
with respect to the voting of any Shares are hereby revoked and the undersigned 
agrees not to grant any subsequent proxies with respect to such Shares until    
after the Expiration Date (as defined below).                                   

This Irrevocable Proxy is irrevocable (to the fullest extent permitted by 
California law), is coupled with an interest, and is granted in consideration   
of Parent entering into that certain Agreement and Plan of Merger (the "Merger  
Agreement") by and between Parent and the Company, which Merger Agreement       
provides for the merger of the Company with and into Parent (the "Merger"). As  
used herein, the term "Expiration Date" shall mean the earlier to occur of (i)  
such date and time as the Merger shall become effective in accordance with the  
terms and provisions of the Merger Agreement, and (ii) the date of termination  
of the Merger Agreement.                                                        

The attorneys and proxies named above, and each of them are hereby        
authorized and empowered by the undersigned, at any time prior to the           
Expiration Date, to act as the undersigned's attorney and proxy to vote the     
Shares, and to exercise all voting rights of the undersigned with respect to    
the Shares (including, without limitation, the power to execute and deliver     
written consents), at every annual, special or adjourned meeting of the         
shareholders of the Company and in every written consent in lieu of such        
meeting: (a) in favor of adoption of the Merger Agreement and the terms         
thereof, and each of the other transactions contemplated by the Merger          
Agreement, and any matter which would, or could reasonably be expected to,      
facilitate the Merger; (b) against approval of any proposal made in opposition  
to or competition with consummation of the Merger and the Merger Agreement; (c) 
against any merger, consolidation or other business combination of the Company  
with, sale of assets or stock of the Company to, or reorganization or           
recapitalization involving the Company, other than as contemplated or permitted 
by the Merger Agreement; (d) against any liquidation, or winding up of the      
Company; and (e) against any other proposal or action which would, or could     
reasonably be expected to, prohibit or discourage the Merger, including any     
amendment of the articles of incorporation or bylaws of the Company not         
previously contemplated under the Merger Agreement which would dilute in any    
material respect the benefits to Parent of the Merger or change in any manner   
the voting rights of any shares of Company Capital Stock.                       

The attorneys and proxies named above may not exercise this Irrevocable   
Proxy on any other matter except as provided above. The undersigned shareholder 
may vote the Shares on all other matters.                                       

 All authority herein conferred shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding    
upon the heirs, personal representatives, successors and assigns of the         
undersigned.                                                                    

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This Irrevocable Proxy is coupled with an interest as aforesaid and is    
irrevocable.                                                                    

Dated:         , 2001                                                           

                                         _____________________________________
                              (Signature of Shareholder)

                                         _____________________________________
                               (Print Name of Shareholder)

                           Shares owned of record:

                                         ___________________________ shares of
                        Company Common Stock

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                                                                     APPENDIX IV

MAYAN NETWORKS CORPORATION

DATE

Name                                                                            
[Address]                                                                       

Re:  Employment and Non-Competition Agreement.                              

Dear [NAME]:                                                                    

You have been identified as a key employee of Ariel Corporation (the      
"Company") and hereby agree to continue your employment with the Company        
following the Closing (as that term is defined in the Agreement and Plan of     
Merger, dated March 28, 2001 (the "Merger Agreement"), by and between the       
Company and Mayan Networks Corporation ("Mayan Networks Corporation")) of the   
transactions contemplated by the Merger Agreement, on the following terms (the  
"Employment Agreement"):                                                        

1. Employment.                                                            

1.1  Position. You will start in a full-time position as             .
You will report directly to the                   .                         

 1.2  Duties. You shall assume and discharge such duties as are mutually
agreed upon by you and the Company and as are commensurate with your        
position.                                                                   

  1.3Period of Employment. You agree to remain employed by the Company for
a period of two years after the Closing (the "Initial Term"). Unless the    
Company or you give notice to the other within twenty calendar days prior   
to the expiration of the Initial Term, or any subsequent terms, of an       
intent not to renew this Employment Agreement, it shall automatically renew 
for an additional one year term and you would be deemed to have agreed to   
remain employed for an additional one year period. Notwithstanding the      
foregoing, the Company may terminate your employment at any time for any    
reason, with or without cause, by giving you written notice of such         
termination.                                                                

2. Compensation and Benefits.                                             

2.1 Annual Salary. You will receive an annual base salary of          
$             , less all applicable deductions, payable in accordance with  
the Company's standard payroll schedule. Payment will begin as of the first 
standard payroll following the Closing.                                     

2.2 Employee Benefits. You will participate in all of the Company's   
employee benefits, benefit plans and programs for which you are eligible.   

3. Termination of Employment.                                             

3.1 Definitions. For purposes of this Employment Agreement:           

3.1.1 "Good Reason" for resignation shall exist if, without your  
consent, the Company requires you to relocate fifty (50) miles or more  
from your current place of work, and you resign within thirty (30) days 
of such relocation.                                                     

  3.1.2 "Cause" for a termination shall exist for any of the following
reasons: (a) your failure to perform the duties of your position after  
receipt of a written warning; (b) any violation of this Employment      
Agreement or any confidentiality or proprietary information agreement   
with the Company; (c) any act of misconduct; (d) conviction of, or a    
plea of "guilty" or "no contest" to, a crime other than a traffic       
offense; (e) committing an act of fraud against, or the                 
misappropriation of property belonging to the Company; or (f) your      
gross negligence in connection with your                                

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employment. A termination of your employment by the Company for any     
other reason will be a termination "Without Cause."                     

3.2 Method of Termination. Your employment pursuant to this Employment
Agreement shall terminate upon the first of the following to occur:         

3.2.1 Your death; or                                              

  3.2.2 The date that written notice is deemed given by the Company to
you that as a result of any physical or mental injury or disability,    
you are unable to perform the essential functions of your job, with or  
without reasonable accommodation. Such notice may be issued when the    
Company has reasonably determined that you have become unable to        
perform substantially your services and duties hereunder with or        
without reasonable accommodation because of any physical or mental      
injury or disability, and that it is reasonably likely that you will    
not be able to resume substantially performing your services and duties 
on substantially the terms and conditions as set forth in the           
Employment Agreement; or                                                

3.2.3 The date that written notice is deemed given or made by the 
Company to you that your employment is terminated; or                   

3.2.4 The date that written notice is deemed given by you of your 
resignation.                                                            

 3.3 Notice of Termination. Any termination of your employment either by
the Company or by you shall be communicated by written Notice of            
Termination to the other party hereto in accordance with this Employment    
Agreement.                                                                  

3.4 Effect of Termination Without Cause.                              

3.4.1 If the Company terminates your employment "Without Cause" or
you resign for "Good Reason" within the Initial Term, then the Company  
will continue your base salary as a severance payment until the earlier 
of (a) six months after the termination of your employment or (b) the   
date you begin employment with another employer. You will notify the    
Company in writing within ten days of your acceptance of any new        
employment. Upon such a termination, any shares subject to stock        
option(s) ("Options") to purchase shares of Common Stock, par value     
$.001 per share, of the Company ("Company Stock") that you hold at the  
time of your termination will vest as though you had continued          
employment for an additional two years after the termination date.      

3.4.2 If the Company terminates your employment "Without Cause" or
you resign for "Good Reason" after the Initial Term, then the Company   
will continue your base salary as a severance payment until the earlier 
of (a) three months after the termination of your employment or (b) the 
date you begin employment with another employer. You will notify the    
Company in writing within ten days of your acceptance of any new        
employment. Upon such a termination, any shares subject to Options that 
you hold at the time of your termination will vest as though you had    
continued employment for an additional one year after the termination   
date.                                                                   

 3.4.3 To receive any severance benefits, you must execute a general
release (in a form prescribed by the Company) of all known and unknown  
claims that you may then have against the Company or persons affiliated 
with the Company, including any successor, and agree not to prosecute   
any legal action or other proceeding based upon any of such claims. The 
severance set forth herein will be in lieu of any entitlement you may   
have to notice of termination, pay in lieu of notice of termination, or 
any other severance payment from any other source. All benefits and     
future stock and option vesting would terminate as of the date of       
termination of your employment and any extended lock-up period          
applicable to any options accelerated under these provisions would      
remain in effect. You would, of course, be paid your salary through     
your date of termination and for the value of all unused paid time off  
earned through that date and allowed to continue your medical coverage  
at your own expense to the extent provided for by COBRA, but you would  
not be entitled to any additional payments or benefits except as set    
forth herein.                                                           

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--------                                                                        
1  Confirm that no restricted stock is outstanding.                             

3.5 Effect of Termination or Resignation Prior to Expiration of the   
Initial Term. If you were to resign, except for Good Reason, or your        
employment were to be terminated for "Cause" within the Initial Term, then  
you would be paid all salary and benefits, as well as for the value of your 
unused paid time off, through the date of termination of your employment,   
but nothing else. Please be aware that your resignation for any reason      
within the Initial Term will be a material breach of this Employment        
Agreement.                                                                  

4. Option Repricing.                                                      

4.1 Prior to Closing, the Company contemplates adopting a program     
pursuant to which certain vested and unvested Options you may hold will be  
cancelled and/or cashed-out and new Options with an exercise price equal to 
the fair market value on the date of grant will be granted in place thereof 
(the "Repricing").                                                          

  4.2 Notwithstanding the foregoing, if (a) you resign within 12 months of
the Closing or (b) the Repricing is not completed prior to the Closing,     
this Section 4 will become null and void and the exercise price of your     
current Options will (i) be reinstated in the case of (a) above or          
(ii) remain in full force and effect in the case of (b) above.              

5. Waiver.                                                                

5.1 You currently hold the following outstanding Options with         
acceleration provisions/1/:                                                 

                                                                [Download Table]

                                                    Number of Outstanding
Grant/Purchase Date     Exercise/Purchase Price         Option Shares    
-------------------     -----------------------     ---------------------
                                                                         
                                $                                        

5.2 Under the terms of the Company's 1995 Stock Option Plan (the      
"Plan"), your Stock Option Agreement and/or your current employment and/or  
severance agreement, in the event of a change of control of the Company,    
certain outstanding Options you hold will vest in full. In order to         
complete the transactions contemplated by the Merger Agreement, the Company 
must have your agreement to waive any vesting acceleration you would        
otherwise have been entitled to under the terms of the Plan.                

5.3 In order to facilitate the Closing, and in consideration for the  
benefits you will receive pursuant to this Employment Agreement and as a    
result of the transactions contemplated by the Merger Agreement, you hereby 
knowingly and freely agree to the waiver of any acceleration of vesting of  
your Options that you may have been entitled to in connection with such     
transactions.                                                               

6. Unvested Options.                                                      

6.1 The shares of Company Stock subject to your outstanding Options   
which are unvested at the Closing (the "Unvested Option Shares"), will vest 
in a series of installments in accordance with the following vesting        
schedule:                                                                   

6.1.1 25% of the Unvested Option Shares shall vest upon your      
completion of one year of providing services for the Company as an      
employee, a member of the Company's Board of Directors or an            
independent consultant with the Company ("Service") measured from the   
date of the Closing;                                                    

6.1.2 An additional 25% of the Unvested Option Shares shall vest  
upon your completion of one year of Service with the Company measured   
from the date of the first anniversary of the Closing; and              

 6.1.3 The remaining 50% of the Unvested Option Shares shall vest in
a series of 24 successive equal monthly installments upon your          
completion of each month of Service with the Company over the 24-month  
period measured from the date of the second anniversary of the Closing. 

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--------                                                                        
2  These rules can be found at the website: http://adr.org/rules/employment/.   

7. Non-Competition.                                                       

7.1 You agree that during your employment with the Company and        
continuing until one year after your termination date, you will not, as an  
employee, agent, consultant, advisor, independent contractor, general       
partner, officer, director, stockholder, investor, lender or guarantor of   
any corporation, partnership or other entity, or in any other capacity      
directly or indirectly;                                                     

1. participate or engage in the design, development, manufacture, 
production, marketing, sale or servicing of any product, or the         
provision of any service, that directly relates to remote access        
systems (hereafter referred to as "the Business") in North America,     
Europe and Asia; or                                                     

2. permit your name to be used in connection with a business which
is competitive or substantially similar to the Business.                

 7.2 Notwithstanding the foregoing, you may own, directly or indirectly,
solely as an investment, up to one percent (1%) of any class of "publicly   
traded securities" of any business that is competitive or substantially     
similar to the Business. The term "publicly traded securities" shall mean   
securities that are traded on a national securities exchange or listed on   
the National Association of Securities Dealers Automated Quotation System.  

7.3 If any restriction set forth in this Section 7 is found by a court
to be unreasonable, then you agree, and hereby submit, to the reduction and 
limitation of such prohibition to such area and/or period as shall be       
deemed reasonable. You acknowledge that the services that you will provide  
under this Employment Agreement are unique and that irreparable harm will   
be suffered by the Company in the event of the breach by you of any of your 
obligations under this Employment Agreement, and the Company will be        
entitled, in addition to its other rights, to enforce by an injunction or   
decree of specific performance the obligations set forth in this Employment 
Agreement. Any claims asserted by you against the Company shall not         
constitute a defense in any injunction action brought by the Company to     
obtain specific enforcement of this Section 7.                              

8. Arbitration.                                                           

8.1 We each agree that any and all disputes between us which arise out
of or relate to your employment, the termination of your employment, or the 
terms of this Agreement shall be resolved through final and binding         
arbitration. Such arbitration shall be in lieu of any trial before a judge  
and/or jury, and you and the Company expressly waive all rights to have     
such disputes resolved via trial before a judge and/or jury. Such disputes  
shall include, without limitation, claims for breach of contract or of the  
covenant of good faith and fair dealing, claims of discrimination, claims   
under any federal, state or local law or regulation now in existence or     
hereinafter enacted and as amended from time to time concerning in any way  
the subject of your employment with the Company or its termination. The     
only claims not covered by this Agreement to arbitrate disputes are: (i)    
claims for benefits under unemployment insurance benefits under any state   
law; (ii) claims for workers' compensation benefits under any the Company   
workers' compensation insurance policy or fund; (iii) claims arising from   
or relating to Section 7 of this Agreement; and (iv) claims concerning the  
validity, infringement, ownership, or enforceability of any trade secret,   
patent right, copyright, trademark or any other intellectual property       
right, and any claim pursuant to or under any existing                      
confidential/proprietary/trade secrets information and inventions           
agreement(s) such as but not limited to the Company's                       
confidential/proprietary/trade secrets information and inventions           
agreement. With respect to such disputes, they shall not be subject to      
arbitration; rather, they will be resolved pursuant to applicable law.      

  8.2 Arbitration shall be conducted in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration       
Association ("AAA Rules")/2/; provided, however, that the arbitrator shall  
allow the discovery authorized by California Code of Civil Procedure        
section 1282, et seq., or any other discovery required by applicable law in 
arbitration proceedings, including but not                                  

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limited to discovery available under the applicable state and/or federal    
arbitration statutes. Also, to the extent that any of the AAA Rules or      
anything in this arbitration section conflicts with any arbitration         
procedures required by applicable law, the arbitration procedures required  
by applicable law shall govern.                                             

8.3 Arbitration will be conducted at a location of the Company's      
choosing, unless applicable law requires otherwise.                         

 8.4 During the course of the arbitration, you and the Company will each
bear equally the arbitrator's fee and any other type of expense or cost of  
arbitration, unless applicable law requires otherwise, and each shall bear  
their own respective attorneys' fees incurred in connection with the        
arbitration. The arbitrator will not have authority to award attorneys'     
fees unless a statute or contract at issue in the dispute authorizes the    
award of attorneys' fees to the prevailing party. In such case, the         
arbitrator shall have the authority to make an award of attorneys' fees as  
required or permitted by the applicable statute or contract. If there is a  
dispute as to whether you or the Company is the prevailing party in the     
arbitration, the arbitrator will decide this issue.                         

8.5 The arbitrator shall issue a written award that sets forth the    
essential findings of fact and conclusions of law on which the award is     
based. The arbitrator shall have the authority to award any relief          
authorized by law in connection with the asserted claims or disputes. The   
arbitrator's award shall be subject to correction, confirmation, or         
vacation, as provided by applicable law setting forth the standard of       
judicial review of arbitration awards. Judgment upon the arbitrator's award 
may be entered in any court having jurisdiction thereof.                    

9. Other Agreements.                                                      

9.1 You will be required, as a condition of the effectiveness of this 
Employment Agreement, to execute:                                           

9.1.1 The Company's confidential/proprietary/trade secrets        
information and inventions agreement.                                   

9.1.2 Any documentation Mayan Networks Corporation determines is  
advisable and/or necessary to execute in order to effectuate the        
agreements contained in Sections 4, 5 and 6.                            

10. Miscellaneous.                                                        

10.1 Notices. All notices, demands and requests required by this      
Employment Agreement shall be in writing and shall be deemed to have been   
given or made for all purposes (i) upon personal delivery, (ii) one day     
after being sent, when sent by professional overnight courier service,      
(iii) five days after posting when sent by registered or certified mail, or 
(iv) on the date of transmission when sent by telegraph, telex or other     
form of "hard copy" transmission, to either party hereto at the address set 
forth below or at such other address as either party may designate by       
notices pursuant to this Section 10.                                        

If to the Company, to:                                                

   _________________________________________________________________________

   _________________________________________________________________________

   _________________________________________________________________________

If to Executive, to:                                                  

   _________________________________________________________________________

   _________________________________________________________________________

   _________________________________________________________________________

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10.2 Effective Date. The terms of this Employment Agreement shall take
effect immediately following the Closing.                                   

  10.3 Governing Law. The provisions of this Employment Agreement shall be
construed and interpreted under the laws of the State of New Jersey.        

10.4 Amendment. This Employment Agreement may be modified or amended  
only by written agreement signed by the President of the Company and you.   

10.5 Waivers. No waiver of any term or provision of this Employment   
Agreement will be valid unless such waiver is in writing signed by the      
party against whom enforcement of the waiver is sought. The waiver of any   
term or provision of the Employment Agreement shall not apply to any        
subsequent breach of this Employment Agreement.                             

 10.6 Counterparts. This Employment Agreement may be executed in several
counterparts, each of which shall be deemed an original, but together they  
shall constitute one and the same instrument.                               

 10.7 Severability. The provisions of this Employment Agreement shall be
deemed severable, and if any part of any provision is held illegal, void or 
invalid under applicable law, such provision may be changed to the extent   
reasonably necessary to make the provision, as so changed, legal, valid and 
binding. If any provision of this Employment Agreement is held illegal,     
void or invalid in its entirety, the remaining provisions of this           
Employment Agreement shall not in any way be affected or impaired but shall 
remain binding in accordance with their terms.                              

  10.8 Successors and Assigns. The provisions of this Employment Agreement
will inure to the benefit of, and be binding upon, the Company and its      
successors and assigns and upon you and the legal representatives, heirs    
and legatees of your estate, whether or not any such person becomes a party 
to this Employment Agreement and agrees in writing to be bound by the terms 
hereof.                                                                     

10.9  Entire Agreement. This Employment Agreement and the Company's   
confidential/ proprietary/trade secrets information and inventions          
agreement, as well as any pre-existing stock, stock option and /or purchase 
agreement(s) between you and the Company, any amendments and waivers        
thereto, and any loan agreement(s) between you and the Company, will be the 
entire agreement relating to your employment with the Company. In addition, 
any confidential/proprietary/trade secrets information inventions           
agreement(s) between you and the Company, or any predecessor thereto, shall 
remain in effect as it pertains to subject matters existing prior to the    
Effective Date. These agreements supersede and replace any prior            
understandings or agreements, whether oral or written, between you and the  
Company regarding the subject matter described in this letter.              

               THE COMPANY

                                         By: _________________________________

                                         Title: ______________________________

I have read and accept this employment offer:                                   

_____________________________________                                           
Signature of Employee                                           
Dated: ______________________________                                           

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                                                                      APPENDIX V

ANNEX D 

MARKET STANDOFF AGREEMENT 

[Ariel Corporation/Mayan Networks Corporation]                                  

Re: Proposed Merger of Ariel Corporation and Mayan Networks Corporation   

Ladies and Gentlemen:                                                           

The undersigned understands that Mayan Networks Corporation, a California 
corporation ("Company") and Ariel Corporation, a Delaware corporation           
("Parent") have entered into an Agreement and Plan of Merger, dated as of March 
28, 2001 (the "Merger Agreement"), pursuant to which the Company will merge     
with and into Parent (the "Merger"). Capitalized terms not otherwise defined    
herein shall have the same meaning given to them in the Merger Agreement.       

In recognition of the benefit that the Merger will confer upon the        
undersigned as a securityholder, officer and/or director of [Parent/Company],   
and for other good and valuable consideration, the receipt and sufficiency of   
which are hereby acknowledged, the undersigned agrees with [Parent/Company],    
that, from the Effective Time until the one year anniversary of the Effective   
Time, the undersigned will not directly or indirectly (i) issue, offer to sell, 
pledge, sell, contract to sell, sell any option or contract to purchase,        
purchase any option or contract to sell, grant any option, right or warrant for 
the sale of, or otherwise dispose of or transfer any shares of Parent Common    
Stock or any securities convertible into or exchangeable or exercisable for     
Parent Common Stock, whether now owned or hereafter acquired by the undersigned 
or with respect to which the undersigned has or hereafter acquires the power of 
disposition, including shares of Parent Common Stock received in the Merger or  
upon exercise of any option to purchase Company Common Stock that is assumed by 
Parent in the Merger or (ii) enter into any swap or any other agreement or any  
transaction that transfers, in whole or in part, directly or indirectly, the    
economic consequence of ownership of the Parent Common Stock or any securities  
convertible into or exchangeable for the Parent Common Stock, whether any such  
swap transaction is to be settled by delivery of Parent Common Stock or other   
securities, in cash or otherwise.                                               

The foregoing paragraph shall not apply to (a) transactions by any person 
relating to shares of Parent Common Stock or other securities acquired in open  
market transactions after the Effective Time, (b) transfers of Parent Common    
Stock or any securities convertible into or exercisable or exchangeable for     
Parent Common Stock to a member of the undersigned's family or to a trust of    
which the undersigned or a family member is the beneficiary (either one a       
"Transferee") provided that upon any such transfer, the Transferee shall sign a 
letter substantially similar to this letter agreement.                          

The undersigned agrees and consents to the entry of stop transfer         
instructions with Parent's transfer agent against the transfer of shares of     
Parent Common Stock held by the undersigned unless such transfer is made in     
compliance with this Agreement. The undersigned understands and agrees that     
Parent shall be entitled to affix an appropriate legend to any certificate      
representing shares of Parent Common Stock reflecting the restrictions set      
forth in this Agreement.                                                        

This Agreement is irrevocable and may only be amended in writing if agreed
to by the vote of the Board of Directors of [Parent/Company].                   

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  The undersigned agrees that the provisions of this letter agreement shall be
binding also upon the successors, assigns, heirs and personal representatives   
of the undersigned.                                                             

                     Very truly yours,

Date: _______________________________     _____________________________________ 
                                        (Name of Entity or Individual-Please
                                          Print)

                                         _____________________________________
                                         (Signature)

                                         _____________________________________
                                        (Name of Person signing on behalf of
                                         Entity, if applicable-Please Print)

                                         _____________________________________
                                        (Title of Person signing on behalf
                                         of Entity, if applicable-Please
                                          Print)

                 On behalf of:

                                         _____________________________________
                                        (Name of Entity)

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                                                                     APPENDIX VI

ARIEL CORPORATION 

2001 STOCK INCENTIVE PLAN 

ARTICLE ONE 

GENERAL PROVISIONS

I. Purpose of the Plan                                                          

  This 2001 Stock Incentive Plan is intended to promote the interests of Ariel
Corporation, a Delaware corporation, by providing eligible persons in the       
Corporation's service with the opportunity to acquire a proprietary interest,   
or otherwise increase their proprietary interest, in the Corporation as an      
incentive for them to remain in such service.                                   

Capitalized terms shall have the meanings assigned to such terms in the   
attached Appendix.                                                              

II. Structure of the Plan                                                       

  A. The Plan shall be divided into three separate equity incentives programs:

. the Discretionary Option Grant Program under which eligible persons   
may, at the discretion of the Plan Administrator, be granted options
to purchase shares of Common Stock,                                 

. the Stock Issuance Program under which eligible persons may, at the   
discretion of the Plan Administrator, be issued shares of Common    
Stock directly, either through the immediate purchase of such shares
 or as a bonus for services rendered the Corporation (or any Parent or
Subsidiary), and                                                    

. the Automatic Option Grant Program under which eligible non-employee  
 Board members shall automatically receive option grants at designated
intervals over their period of continued Board service.             

B. The provisions of Articles One and Five shall apply to all equity      
programs under the Plan and shall govern the interests of all persons under the 
Plan.                                                                           

III. Administration of the Plan                                                 

A. The Primary Committee shall have sole and exclusive authority to       
administer the Discretionary Option Grant and Stock Issuance Programs with      
respect to Section 16 Insiders. Administration of the Discretionary Option      
Grant and Stock Issuance Programs with respect to all other persons eligible to 
participate in those programs may, at the Board's discretion, be vested in the  
Primary Committee or a Secondary Committee, or the Board may retain the power   
to administer those programs with respect to all such persons. However, any     
discretionary option grants or stock issuances for members of the Primary       
Committee must be authorized by a disinterested majority of the Board.          

B. Members of the Primary Committee or any Secondary Committee shall serve
for such period of time as the Board may determine and may be removed by the    
Board at any time. The Board may also at any time terminate the functions of    
any Secondary Committee and reassume all powers and authority previously        
delegated to such committee.                                                    

C. Each Plan Administrator shall, within the scope of its administrative  
functions under the Plan, have full power and authority (subject to the         
provisions of the Plan) to establish such rules and regulations as it may deem  
appropriate for proper administration of the Discretionary Option Grant and     
Stock Issuance Programs and to make such determinations under, and issue such   
interpretations of, the provisions of those programs and any outstanding        
options or stock issuances thereunder as it may deem necessary or advisable.    
Decisions of the Plan Administrator within the scope of its administrative      
functions under the Plan shall be final and binding on all parties who have an  
interest in the Discretionary Option Grant and Stock Issuance Programs under    
its jurisdiction or any stock option or stock issuance thereunder.              

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D. Service on the Primary Committee or the Secondary Committee shall      
constitute service as a Board member, and members of each such committee shall  
accordingly be entitled to full indemnification and reimbursement as Board      
members for their service on such committee. No member of the Primary           
Committee or the Secondary Committee shall be liable for any act or omission    
made in good faith with respect to the Plan or any option grants or stock       
issuances under the Plan.                                                       

E. Administration of the Automatic Option Grant Program shall be self-    
executing in accordance with the terms of that program, and no Plan             
Administrator shall exercise any discretionary functions with respect to any    
option grants or stock issuances made under that program.                       

IV. Eligibility                                                                 

A. The persons eligible to participate in the Discretionary Option Grant  
and Stock Issuance Programs are as follows:                                     

(i) Employees,                                                        

 (ii) non-employee members of the Board or the board of directors of any
Parent or Subsidiary, and                                                   

  (iii) consultants and other independent advisors who provide services to
the Corporation (or any Parent or Subsidiary).                              

B. Each Plan Administrator shall, within the scope of its administrative  
jurisdiction under the Plan, have full authority to determine, (i) with         
respect to the option grants under the Discretionary Option Grant Program,      
which eligible persons are to receive such grants, the time or times when       
those grants are to be made, the number of shares to be covered by each such    
grant, the status of the granted option as either an Incentive Option or a      
Non-Statutory Option, the time or times when each option is to become           
exercisable, the vesting schedule (if any) applicable to the option shares and  
the maximum term for which the option is to remain outstanding and (ii) with    
respect to stock issuances under the Stock Issuance Program, which eligible     
persons are to receive such issuances, the time or times when the issuances     
are to be made, the number of shares to be issued to each Participant, the      
vesting schedule (if any) applicable to the issued shares and the               
consideration for such shares.                                                  

C. The Plan Administrator shall have the absolute discretion either to    
grant options in accordance with the Discretionary Option Grant Program or to   
effect stock issuances in accordance with the Stock Issuance Program.           

D. The individuals who shall be eligible to participate in the Automatic  
Option Grant Program shall be limited to (i) those individuals who first        
become non-employee Board members on or after the Plan Effective Date, whether  
through appointment by the Board or election by the Corporation's               
stockholders, and (ii) those individuals who continue to serve as non-employee  
Board members at one or more Annual Stockholders Meetings held after the Plan   
Effective Date. A non-employee Board member who has previously been in the      
employ of the Corporation (or any Parent or Subsidiary) shall not be eligible   
to receive an option grant under the Automatic Option Grant Program at the      
time he or she first becomes a non-employee Board member, but shall be          
eligible to receive periodic option grants under the Automatic Option Grant     
Program while he or she continues to serve as a non-employee Board member.      

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V. Stock Subject to the Plan                                                    

A. The stock issuable under the Plan shall be shares of authorized but    
unissued or reacquired Common Stock, including shares repurchased by the        
Corporation on the open market. The number of shares of Common Stock initially  
reserved for issuance over the term of the Plan shall not exceed       shares.  
Such reserve shall consist of (i)      /1/ shares, the number of shares that    
remain available for issuance, as of the Plan Effective Date, under the         
Predecessor Plans, including the shares subject to outstanding options under    
the Predecessor Plans transferred to the Plan, (ii) plus an additional increase 
of approximately       shares.                                                  

B. The number of shares of Common Stock available for issuance under the  
Plan shall automatically increase on the first trading day of January each      
calendar year during the term of the Plan, beginning with calendar year 2002,   
by an amount equal to     percent (  %) of the total number of shares of Common 
Stock outstanding on the last trading day in December of the immediately        
preceding calendar year, but in no event shall any such annual increase exceed  
shares.                                                             

C. No one person participating in the Plan may receive stock options,     
separately exercisable stock appreciation rights and direct stock issuances for 
more than       shares of Common Stock in the aggregate per calendar year.      

 D. Shares of Common Stock subject to outstanding options (including options
transferred to this Plan from the Predecessor Plans) shall be available for     
subsequent issuance under the Plan to the extent (i) those options expire or    
terminate for any reason prior to exercise in full or (ii) the options are      
cancelled in accordance with the cancellation-regrant provisions of Article     
Two. Unvested shares issued under the Plan and subsequently cancelled or        
repurchased by the Corporation, at the original issue price paid per share,     
pursuant to the Corporation's repurchase rights under the Plan shall be added   
back to the number of shares of Common Stock reserved for issuance under the    
Plan and shall accordingly be available for reissuance through one or more      
subsequent option grants or direct stock issuances under the Plan. However,     
should the exercise price of an option under the Plan be paid with shares of    
Common Stock or should shares of Common Stock otherwise issuable under the Plan 
be withheld by the Corporation in satisfaction of the withholding taxes         
incurred in connection with the exercise of an option or the vesting of a stock 
issuance under the Plan, then the number of shares of Common Stock available    
for issuance under the Plan shall be reduced by the gross number of shares for  
which the option is exercised or which vest under the stock issuance, and not   
by the net number of shares of Common Stock issued to the holder of such option 
or stock issuance. Shares of Common Stock underlying one or more stock          
appreciation rights granted pursuant to the Plan shall not be available for     
subsequent issuance under the Plan.                                             

E. If any change is made to the Common Stock by reason of any stock split,
stock dividend, recapitalization, combination of shares, exchange of shares or  
other change affecting the outstanding Common Stock as a class without the      
Corporation's receipt of consideration, appropriate adjustments shall be made   
by the Plan Administrator to (i) the maximum number and/or class of securities  
issuable under the Plan, (ii) the maximum number and/or class of securities for 
which any one person may be granted stock options, separately exercisable stock 
appreciation rights and direct stock issuances under the Plan per calendar      
year, (iii) the number and/or class of securities for which grants are          
subsequently to be made under the Automatic Option Grant Program to new and     
continuing non-employee Board members, (iv) the number and/or class of          
securities and the exercise price per share in effect under each outstanding    
option under the Plan, (v) the number and/or class of securities and exercise   
price per share in effect under each outstanding option transferred to this     
Plan from the Predecessor Plans and (vi) the maximum number and/or class of     
securities by which the share reserve is to increase automatically each         
calendar year pursuant to the provisions of Section V.B of this Article One.    
Such adjustments to the outstanding options are to be effected in a manner      
which shall preclude the enlargement or dilution of rights and benefits under   
such options. The adjustments determined by the Plan Administrator shall be     
final, binding and conclusive.                                                  
--------                                                                        
1  Reserves: 600,000--1992 Plan; 250,000 for employees and 250,000 for non-     
employees--1994 Plan; 600,000--1995 Plan; 250,000--1996 Directors Plan;   
6,585,937 (pre-conversion)--Mayan Plan.                                   

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ARTICLE TWO 

DISCRETIONARY OPTION GRANT PROGRAM

I. Option Terms                                                                 

  Each option shall be evidenced by one or more documents in the form approved
by the Plan Administrator; provided, however, that each such document shall     
comply with the terms specified below. Each document evidencing an Incentive    
Option shall, in addition, be subject to the provisions of the Plan applicable  
to such options.                                                                

A. Exercise Price.                                                        

  1. The exercise price per share shall be fixed by the Plan Administrator
but shall not be less than one hundred percent (100%) of the Fair Market    
Value per share of Common Stock on the option grant date.                   

 2. The exercise price shall become immediately due upon exercise of the
option and shall, subject to the provisions of Section I of Article Five    
and the documents evidencing the option, be payable in one or more of the   
forms specified below:                                                      

(i) cash or check made payable to the Corporation,                

 (ii) shares of Common Stock held for the requisite period necessary
to avoid a charge to the Corporation's earnings for financial reporting 
purposes and valued at Fair Market Value on the Exercise Date, or       

(iii) to the extent the option is exercised for vested shares,    
through a special sale and remittance procedure pursuant to which the   
Optionee shall concurrently provide irrevocable instructions to (a) a   
Corporation-designated brokerage firm to effect the immediate sale of   
the purchased shares and remit to the Corporation, out of the sale      
proceeds available on the settlement date, sufficient funds to cover    
the aggregate exercise price payable for the purchased shares plus all  
applicable Federal, state and local income and employment taxes         
required to be withheld by the Corporation by reason of such exercise   
and (b) the Corporation to deliver the certificates for the purchased   
shares directly to such brokerage firm in order to complete the sale.   

Except to the extent such sale and remittance procedure is utilized,  
payment of the exercise price for the purchased shares must be made on the  
Exercise Date.                                                              

B. Exercise and Term of Options. Each option shall be exercisable at such 
time or times, during such period and for such number of shares as shall be     
determined by the Plan Administrator and set forth in the documents evidencing  
the option. However, no option shall have a term in excess of ten (10) years    
measured from the option grant date.                                            

C. Effect of Termination of Service.                                      

1. The following provisions shall govern the exercise of any options  
held by the Optionee at the time of cessation of Service or death:          

(i) Any option outstanding at the time of the Optionee's cessation
of Service for any reason shall remain exercisable for such period of   
time thereafter as shall be determined by the Plan Administrator and    
set forth in the documents evidencing the option, but no such option    
shall be exercisable after the expiration of the option term.           

(ii) Any option held by the Optionee at the time of death and     
exercisable in whole or in part at that time may be subsequently        
exercised by the personal representative of the Optionee's estate or by 
the person or persons to whom the option is transferred pursuant to the 
Optionee's will or the laws of inheritance or by the Optionee's         
designated beneficiary or beneficiaries of that option.                 

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 (iii) Should the Optionee's Service be terminated for Misconduct or
should the Optionee otherwise engage in Misconduct while holding one or 
more outstanding options under this Article Two, then all those options 
shall terminate immediately and cease to be outstanding.                

 (iv) During the applicable post-Service exercise period, the option
may not be exercised in the aggregate for more than the number of       
vested shares for which the option is exercisable on the date of the    
Optionee's cessation of Service. Upon the expiration of the applicable  
exercise period or (if earlier) upon the expiration of the option term, 
the option shall terminate and cease to be outstanding for any vested   
shares for which the option has not been exercised. However, the option 
shall, immediately upon the Optionee's cessation of Service, terminate  
and cease to be outstanding to the extent the option is not otherwise   
at that time exercisable for vested shares.                             

2. The Plan Administrator shall have complete discretion, exercisable 
either at the time an option is granted or at any time while the option     
remains outstanding, to:                                                    

(i) extend the period of time for which the option is to remain   
exercisable following the Optionee's cessation of Service from the      
limited exercise period otherwise in effect for that option to such     
greater period of time as the Plan Administrator shall deem             
appropriate, but in no event beyond the expiration of the option term,  
and/or                                                                  

 (ii) permit the option to be exercised, during the applicable post-
Service exercise period, not only with respect to the number of vested  
shares of Common Stock for which such option is exercisable at the time 
of the Optionee's cessation of Service but also with respect to one or  
more additional installments in which the Optionee would have vested    
had the Optionee continued in Service.                                  

D. Stockholder Rights. The holder of an option shall have no stockholder  
rights with respect to the shares subject to the option until such person shall 
have exercised the option, paid the exercise price and become a holder of       
record of the purchased shares.                                                 

E. Repurchase Rights. The Plan Administrator shall have the discretion to 
grant options which are exercisable for unvested shares of Common Stock. Should 
the Optionee cease Service while holding such unvested shares, the Corporation  
shall have the right to repurchase, at the exercise price paid per share, any   
or all of those unvested shares. The terms upon which such repurchase right     
shall be exercisable (including the period and procedure for exercise and the   
appropriate vesting schedule for the purchased shares) shall be established by  
the Plan Administrator and set forth in the document evidencing such repurchase 
right.                                                                          

 F. Limited Transferability of Options. During the lifetime of the Optionee,
Incentive Options shall be exercisable only by the Optionee and shall not be    
assignable or transferable other than by will or the laws of inheritance        
following the Optionee's death. Non-Statutory Options shall be subject to the   
same restriction, except that a Non-Statutory Option may be assigned in whole   
or in part during the Optionee's lifetime to one or more members of the         
Optionee's family or to a trust established exclusively for one or more such    
family members or to Optionee's former spouse, to the extent such assignment is 
in connection with the Optionee's estate plan or pursuant to a domestic         
relations order. The assigned portion may only be exercised by the person or    
persons who acquire a proprietary interest in the option pursuant to the        
assignment. The terms applicable to the assigned portion shall be the same as   
those in effect for the option immediately prior to such assignment and shall   
be set forth in such documents issued to the assignee as the Plan Administrator 
may deem appropriate. Notwithstanding the foregoing, the Optionee may also      
designate one or more persons as the beneficiary or beneficiaries of his or her 
outstanding options under this Article Two, and those options shall, in         
accordance with such designation, automatically be transferred to such          
beneficiary or beneficiaries upon the Optionee's death while holding those      
options. Such beneficiary or beneficiaries shall take the transferred options   
subject to all the terms and conditions of the applicable agreement evidencing  
each such transferred option, including (without limitation) the limited time   
period during which the option may be exercised following the Optionee's death. 

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II. Incentive Options                                                           

The terms specified below shall be applicable to all Incentive Options.   
Except as modified by the provisions of this Section II, all the provisions of  
Articles One, Two and Five shall be applicable to Incentive Options. Options    
which are specifically designated as Non-Statutory Options when issued under    
the Plan shall not be subject to the terms of this Section II.                  

A. Eligibility. Incentive Options may only be granted to Employees.       

B. Dollar Limitation. The aggregate Fair Market Value of the shares of    
Common Stock (determined as of the respective date or dates of grant) for which 
one or more options granted to any Employee under the Plan (or any other option 
plan of the Corporation or any Parent or Subsidiary) may for the first time     
become exercisable as Incentive Options during any one calendar year shall not  
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the    
Employee holds two (2) or more such options which become exercisable for the    
first time in the same calendar year, the foregoing limitation on the           
exercisability of such options as Incentive Options shall be applied on the     
basis of the order in which such options are granted.                           

C. 10% Stockholder. If any Employee to whom an Incentive Option is granted
is a 10% Stockholder, then the exercise price per share shall not be less than  
one hundred ten percent (110%) of the Fair Market Value per share of Common     
Stock on the option grant date, and the option term shall not exceed five (5)   
years measured from the option grant date.                                      

III. Corporate Transaction/Change in Control                                    

 A. In the event of any Corporate Transaction, each outstanding option under
the Discretionary Option Grant Program shall automatically accelerate so that   
each such option shall, immediately prior to the effective date of that         
Corporate Transaction, become exercisable for all the shares of Common Stock at 
the time subject to such option and may be exercised for any or all of those    
shares as fully vested shares of Common Stock. However, an outstanding option   
shall not become exercisable on such an accelerated basis if and to the extent: 
(i) such option is, in connection with the Corporate Transaction, to be assumed 
by the successor corporation (or parent thereof) or (ii) such option is to be   
replaced with a cash incentive program of the successor corporation which       
preserves the spread existing at the time of the Corporate Transaction on any   
shares for which the option is not otherwise at that time exercisable and       
provides for subsequent payout of that spread in accordance with the same       
exercise/vesting schedule applicable to those option shares or (iii) the        
acceleration of such option is subject to other limitations imposed by the Plan 
Administrator at the time of the option grant.                                  

B. All outstanding repurchase rights under the Discretionary Option Grant 
Program shall automatically terminate, and the shares of Common Stock subject   
to those terminated rights shall immediately vest in full, in the event of any  
Corporate Transaction, except to the extent: (i) those repurchase rights are to 
be assigned to the successor corporation (or parent thereof) in connection with 
such Corporate Transaction or (ii) such accelerated vesting is precluded by     
other limitations imposed by the Plan Administrator at the time the repurchase  
right is issued. To the extent the holders of Common Stock receive cash         
consideration for their Common Stock in consummation of the Corporate           
Transaction, the successor corporation may, in connection with the Corporate    
Transaction, substitute one or more shares of its own common stock with a fair  
market value equivalent to the cash consideration paid per share of Common      
Stock in such Corporate Transaction for unvested shares of Common Stock and be  
assigned the Corporation's repurchase rights as to those unvested shares.       

 C. Immediately following the consummation of the Corporate Transaction, all
outstanding options under the Discretionary Option Grant Program shall          
terminate and cease to be outstanding, except to the extent assumed by the      
successor corporation (or parent thereof).                                      

D. Each option which is assumed in connection with a Corporate Transaction
shall be appropriately adjusted, immediately after such Corporate Transaction,  
to apply to the number and class of securities which                            

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would have been issuable to the Optionee in consummation of such Corporate      
Transaction had the option been exercised immediately prior to such Corporate   
Transaction. Appropriate adjustments to reflect such Corporate Transaction      
shall also be made to (i) the exercise price payable per share under each       
outstanding option, provided the aggregate exercise price payable for such      
securities shall remain the same, (ii) the maximum number and/or class of       
securities available for issuance over the remaining term of the Plan and (iii) 
the maximum number and/or class of securities for which any one person may be   
granted stock options, separately exercisable stock appreciation rights and     
direct stock issuances under the Plan per calendar year and (iv) the maximum    
number and/or class of securities by which the share reserve is to increase     
automatically each calendar year. To the extent the actual holders of the       
Corporation's outstanding Common Stock receive cash consideration for their     
Common Stock in consummation of the Corporate Transaction, the successor        
corporation may, in connection with the assumption of the outstanding options   
under the Discretionary Option Grant Program, substitute one or more shares of  
its own common stock with a fair market value equivalent to the cash            
consideration paid per share of Common Stock in such Corporate Transaction.     

E. The Plan Administrator shall have the discretionary authority to       
structure one or more outstanding options under the Discretionary Option Grant  
Program so that those options shall, immediately prior to the effective date of 
such Corporate Transaction, become exercisable for all the shares of Common     
Stock at the time subject to those options and may be exercised for any or all  
of those shares as fully vested shares of Common Stock, whether or not those    
options are to be assumed in the Corporate Transaction. In addition, the Plan   
Administrator shall have the discretionary authority to structure one or more   
of the Corporation's repurchase rights under the Discretionary Option Grant     
Program so that those rights shall not be assignable in connection with such    
Corporate Transaction and shall accordingly terminate upon the consummation of  
such Corporate Transaction, and the shares subject to those terminated rights   
shall thereupon vest in full.                                                   

F. The Plan Administrator shall have full power and authority to structure
one or more outstanding options under the Discretionary Option Grant Program so 
that those options shall become exercisable for all the shares of Common Stock  
at the time subject to those options in the event the Optionee's Service is     
subsequently terminated by reason of an Involuntary Termination within a        
designated period (not to exceed eighteen (18) months) following the effective  
date of any Corporate Transaction in which those options are assumed and do not 
otherwise accelerate. In addition, the Plan Administrator may structure one or  
more of the Corporation's repurchase rights so that those rights shall          
immediately terminate with respect to any shares held by the Optionee at the    
time of his or her Involuntary Termination, and the shares subject to those     
terminated repurchase rights shall accordingly vest in full at that time.       

G. The Plan Administrator shall have the discretionary authority to       
structure one or more outstanding options under the Discretionary Option Grant  
Program so that those options shall, immediately prior to the effective date of 
a Change in Control, become exercisable for all the shares of Common Stock at   
the time subject to those options and may be exercised for any or all of those  
shares as fully vested shares of Common Stock. In addition, the Plan            
Administrator shall have the discretionary authority to structure one or more   
of the Corporation's repurchase rights under the Discretionary Option Grant     
Program so that those rights shall terminate automatically upon the             
consummation of such Change in Control, and the shares subject to those         
terminated rights shall thereupon vest in full. Alternatively, the Plan         
Administrator may condition the automatic acceleration of one or more           
outstanding options under the Discretionary Option Grant Program and the        
termination of one or more of the Corporation's outstanding repurchase rights   
under such program upon the subsequent termination of the Optionee's Service by 
reason of an Involuntary Termination within a designated period (not to exceed  
eighteen (18) months) following the effective date of such Change in Control.   

H. The portion of any Incentive Option accelerated in connection with a   
Corporate Transaction or Change in Control shall remain exercisable as an       
Incentive Option only to the extent the applicable One Hundred Thousand Dollar  
($100,000) limitation is not exceeded. To the extent such dollar limitation is  
exceeded, the accelerated portion of such option shall be exercisable as a      
Nonstatutory Option under the Federal tax laws.                                 

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I. The outstanding options shall in no way affect the right of the        
Corporation to adjust, reclassify, reorganize or otherwise change its capital   
or business structure or to merge, consolidate, dissolve, liquidate or sell or  
transfer all or any part of its business or assets.                             

IV.  Cancellation and Regrant of Options                                        

The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the         
cancellation of any or all outstanding options under the Discretionary Option   
Grant Program (including outstanding options incorporated from the Predecessor  
Plans) and to grant in substitution new options covering the same or a          
different number of shares of Common Stock but with an exercise price per share 
based on the Fair Market Value per share of Common Stock on the new grant date. 

V. Stock Appreciation Rights                                                    

A. The Plan Administrator shall have full power and authority to grant to 
selected Optionees tandem stock appreciation rights and/or limited stock        
appreciation rights.                                                            

B. The following terms shall govern the grant and exercise of tandem stock
appreciation rights:                                                            

(i) One or more Optionees may be granted the right, exercisable upon  
such terms as the Plan Administrator may establish, to elect between the    
exercise of the underlying option for shares of Common Stock and the        
surrender of that option in exchange for a distribution from the            
Corporation in an amount equal to the excess of (a) the Fair Market Value   
(on the option surrender date) of the number of shares in which the         
Optionee is at the time vested under the surrendered option (or surrendered 
portion thereof) over (b) the aggregate exercise price payable for such     
shares.                                                                     

(ii) No such option surrender shall be effective unless it is approved
by the Plan Administrator, either at the time of the actual option          
surrender or at any earlier time. If the surrender is so approved, then the 
distribution to which the Optionee shall be entitled may be made in shares  
of Common Stock valued at Fair Market Value on the option surrender date,   
in cash, or partly in shares and partly in cash, as the Plan Administrator  
shall in its sole discretion deem appropriate.                              

(iii) If the surrender of an option is not approved by the Plan       
Administrator, then the Optionee shall retain whatever rights the Optionee  
had under the surrendered option (or surrendered portion thereof) on the    
option surrender date and may exercise such rights at any time prior to the 
later of (a) five (5) business days after the receipt of the rejection      
notice or (b) the last day on which the option is otherwise exercisable in  
accordance with the terms of the documents evidencing such option, but in   
no event may such rights be exercised more than ten (10) years after the    
option grant date.                                                          

 C. The following terms shall govern the grant and exercise of limited stock
appreciation rights:                                                            

(i) One or more Section 16 Insiders may be granted limited stock      
appreciation rights with respect to their outstanding options.              

  (ii) Upon the occurrence of a Hostile Take-Over, each individual holding
one or more options with such a limited stock appreciation right shall have 
the unconditional right (exercisable for a thirty (30)-day period following 
such Hostile Take-Over) to surrender each such option to the Corporation.   
In return for the surrendered option, the Optionee shall receive a cash     
distribution from the Corporation in an amount equal to the excess of (A)   
the Take-Over Price of the shares of Common Stock at the time subject to    
such option (whether or not the option is otherwise at that time vested and 
exercisable for those shares) over (B) the aggregate exercise price payable 
for those shares. Such cash distribution shall be paid within five (5) days 
following the option surrender date.                                        

 (iii) At the time such limited stock appreciation right is granted, the
Plan Administrator shall pre-approve any subsequent exercise of that right  
in accordance with the terms of this Paragraph C. Accordingly, no further   
approval of the Plan Administrator or the Board shall be required at the    
time of the actual option surrender and cash distribution.                  

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ARTICLE THREE 

STOCK ISSUANCE PROGRAM

I. Stock Issuance Terms                                                         

Shares of Common Stock may be issued under the Stock Issuance Program     
through direct and immediate issuances without any intervening option grants.   
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which 
complies with the terms specified below. Shares of Common Stock may also be     
issued under the Stock Issuance Program pursuant to share right awards which    
entitle the recipients to receive those shares upon the attainment of           
designated performance goals or the satisfaction of specified Service           
requirements.                                                                   

A. Purchase Price.                                                        

1. The purchase price per share shall be fixed by the Plan            
Administrator, but shall not be less than one hundred percent (100%) of the 
Fair Market Value per share of Common Stock on the issuance date.           

2. Subject to the provisions of Section I of Article Five, shares of  
Common Stock may be issued under the Stock Issuance Program for any of the  
following items of consideration which the Plan Administrator may deem      
appropriate in each individual instance:                                    

(i) cash or check made payable to the Corporation, or             

(ii) past services rendered to the Corporation (or any Parent or  
Subsidiary).                                                            

B. Vesting Provisions.                                                    

1. Shares of Common Stock issued under the Stock Issuance Program may,
in the discretion of the Plan Administrator, be fully and immediately       
vested upon issuance or may vest in one or more installments over the       
Participant's period of Service or upon attainment of specified performance 
objectives. The elements of the vesting schedule applicable to any unvested 
shares of Common Stock issued under the Stock Issuance Program shall be     
determined by the Plan Administrator and incorporated into the Stock        
Issuance Agreement. Shares of Common Stock may also be issued under the     
Stock Issuance Program pursuant to share right awards which entitle the     
recipients to receive those shares upon the attainment of designated        
performance goals or the satisfaction of specified Service requirements.    

2. Any new, substituted or additional securities or other property    
(including money paid other than as a regular cash dividend) which the      
Participant may have the right to receive with respect to the Participant's 
unvested shares of Common Stock by reason of any stock dividend, stock      
split, recapitalization, combination of shares, exchange of shares or other 
change affecting the outstanding Common Stock as a class without the        
Corporation's receipt of consideration shall be issued subject to (i) the   
same vesting requirements applicable to the Participant's unvested shares   
of Common Stock and (ii) such escrow arrangements as the Plan Administrator 
shall deem appropriate.                                                     

3. The Participant shall have full stockholder rights with respect to 
any shares of Common Stock issued to the Participant under the Stock        
Issuance Program, whether or not the Participant's interest in those shares 
is vested. Accordingly, the Participant shall have the right to vote such   
shares and to receive any regular cash dividends paid on such shares.       

4. Should the Participant cease to remain in Service while holding one
or more unvested shares of Common Stock issued under the Stock Issuance     
Program or should the performance objectives not be attained with respect   
to one or more such unvested shares of Common Stock, then those shares      
shall be immediately surrendered to the Corporation for cancellation, and   
the Participant shall have no further                                       

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stockholder rights with respect to those shares. To the extent the          
surrendered shares were previously issued to the Participant for            
consideration paid in cash or cash equivalent (including the Participant's  
purchase-money indebtedness), the Corporation shall repay to the            
Participant the cash consideration paid for the surrendered shares and      
shall cancel the unpaid principal balance of any outstanding purchase-money 
note of the Participant attributable to the surrendered shares.             

 5. The Plan Administrator may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock which would     
otherwise occur upon the cessation of the Participant's Service or the non- 
attainment of the performance objectives applicable to those shares. Such   
waiver shall result in the immediate vesting of the Participant's interest  
in the shares of Common Stock as to which the waiver applies. Such waiver   
may be effected at any time, whether before or after the Participant's      
cessation of Service or the attainment or non-attainment of the applicable  
performance objectives.                                                     

  6. Outstanding share right awards under the Stock Issuance Program shall
automatically terminate, and no shares of Common Stock shall actually be    
issued in satisfaction of those awards, if the performance goals or Service 
requirements established for such awards are not attained or satisfied. The 
Plan Administrator, however, shall have the discretionary authority to      
issue shares of Common Stock under one or more outstanding share right      
awards as to which the designated performance goals or Service requirements 
have not been attained or satisfied.                                        

II. Corporate Transaction/Change in Control                                     

A. All of the Corporation's outstanding repurchase rights under the Stock 
Issuance Program shall terminate automatically, and all the shares of Common    
Stock subject to those terminated rights shall immediately vest in full, in the 
event of any Corporate Transaction, except to the extent (i) those repurchase   
rights are to be assigned to the successor corporation (or parent thereof) in   
connection with such Corporate Transaction or (ii) such accelerated vesting is  
precluded by other limitations imposed in the Stock Issuance Agreement. To the  
extent the holders of Common Stock receive cash consideration for their Common  
Stock in consummation of the Corporate Transaction, the successor corporation   
may, in connection with the Corporate Transaction, substitute one or more       
shares of its own common stock with a fair market value equivalent to the cash  
consideration paid per share of Common Stock in such Corporate Transaction for  
unvested shares of Common Stock and be assigned the Corporation's repurchase    
rights as to those unvested shares.                                             

B. The Plan Administrator shall have the discretionary authority to       
structure one or more of the Corporation's repurchase rights under the Stock    
Issuance Program so that those rights shall automatically terminate in whole or 
in part, and the shares of Common Stock subject to those terminated rights      
shall immediately vest, in the event the Participant's Service should           
subsequently terminate by reason of an Involuntary Termination within a         
designated period (not to exceed eighteen (18) months) following the effective  
date of any Corporate Transaction in which those repurchase rights are assigned 
to the successor corporation (or parent thereof).                               

C. The Plan Administrator shall also have the discretionary authority to  
structure one or more of the Corporation's repurchase rights under the Stock    
Issuance Program so that those rights shall automatically terminate in whole or 
in part, and the shares of Common Stock subject to those terminated rights      
shall immediately vest, either upon the occurrence of a Change in Control or    
upon the subsequent termination of the Participant's Service by reason of an    
Involuntary Termination within a designated period (not to exceed eighteen (18) 
months) following the effective date of that Change in Control.                 

III. Share Escrow/Legends                                                       

Unvested shares may, in the Plan Administrator's discretion, be held in   
escrow by the Corporation until the Participant's interest in such shares vests 
or may be issued directly to the Participant with restrictive legends on the    
certificates evidencing those unvested shares.                                  

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ARTICLE FOUR  

AUTOMATIC OPTION GRANT PROGRAM  

I. Option Terms                                                                 

A. Grant Dates. Option grants shall be made on the dates specified below: 

1. Each individual who is first elected or appointed as a non-employee
Board member on or after the Plan Effective Date shall automatically be     
granted, on the date of such initial election or appointment, a Non-        
Statutory Option to purchase                shares of Common Stock,         
provided that individual has not previously been in the employ of the       
Corporation or any Parent or Subsidiary.                                    

2. On the date of each Annual Stockholders Meeting held after the Plan
Effective Date, each individual who is to continue to serve as a non-       
employee Board member, whether or not that individual is standing for re-   
election to the Board at that particular Annual Meeting, shall              
automatically be granted a Non-Statutory Option to purchase                 
shares of Common Stock, provided such individual has served as a non-       
employee Board member for at least six (6) months. There shall be no limit  
on the number of such            -share option grants any one non-employee  
Board member may receive over his or her period of Board service, and non-  
employee Board members who have previously been in the employ of the        
Corporation (or any Parent or Subsidiary) or who have otherwise received    
one or more stock option grants from the Corporation prior to the Plan      
Effective Date shall be eligible to receive one or more such annual option  
grants over their period of continued Board service.                        

B. Exercise Price.                                                        

1. The exercise price per share shall be equal to one hundred percent 
(100%) of the Fair Market Value per share of Common Stock on the option     
grant date.                                                                 

  2. The exercise price shall be payable in one or more of the alternative
forms authorized under the Discretionary Option Grant Program. Except to    
the extent the sale and remittance procedure specified thereunder is        
utilized, payment of the exercise price for the purchased shares must be    
made on the Exercise Date.                                                  

C. Option Term. Each option shall have a term of ten (10) years measured  
from the option grant date.                                                     

D. Exercise and Vesting of Options. Each option shall be immediately      
exercisable for any or all of the option shares. However, any unvested shares   
purchased under the option shall be subject to repurchase by the Corporation,   
at the exercise price paid per share, upon the Optionee's cessation of Board    
service prior to vesting in those shares. The shares subject to each initial    
option grant shall vest, and the Corporation's repurchase right shall lapse,    
in a series of four (4) successive equal annual installments upon the           
Optionee's completion of each year of service as a Board member over the four   
(4)-year period measured from the option grant date. The shares subject to      
each annual option grant shall vest in one installment upon the Optionee's      
completion of the one (1)-year period of service measured from the grant date.  

E. Limited Transferability of Options. Each option under this Article Four
may be assigned in whole or in part during the Optionee's lifetime to one or    
more members of the Optionee's family or to a trust established exclusively     
for one or more such family members or to Optionee's former spouse, to the      
extent such assignment is in connection with the Optionee's estate plan or      
pursuant to a domestic relations order. The assigned portion may only be        
exercised by the person or persons who acquire a proprietary interest in the    
option pursuant to the assignment. The terms applicable to the assigned         
portion shall be the same as those in effect for the option immediately prior   
to such assignment and shall be set forth in such documents issued to the       
assignee as the Plan Administrator may deem appropriate. The Optionee may also  
designate one or more persons as the beneficiary or beneficiaries of his or     
her outstanding options under this Article Four, and those options shall, in    
accordance with such designation, automatically be transferred to such          
beneficiary or beneficiaries upon the Optionee's death while holding those      
options. Such beneficiary or beneficiaries shall take                           

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the transferred options subject to all the terms and conditions of the          
applicable agreement evidencing each such transferred option, including         
(without limitation) the limited time period during which the option may be     
exercised following the Optionee's death.                                       

F. Termination of Board Service. The following provisions shall govern the
exercise of any options held by the Optionee at the time the Optionee ceases to 
serve as a Board member:                                                        

(i) The Optionee (or, in the event of Optionee's death, the personal  
representative of the Optionee's estate or the person or persons to whom    
the option is transferred pursuant to the Optionee's will or the laws of    
inheritance or the designated beneficiary or beneficiaries of such option)  
shall have a twelve (12)-month period following the date of such cessation  
of Board service in which to exercise each such option.                     

  (ii) During the twelve (12)-month exercise period, the option may not be
exercised in the aggregate for more than the number of vested shares of     
Common Stock for which the option is exercisable at the time of the         
Optionee's cessation of Board service.                                      

 (iii) Should the Optionee cease to serve as a Board member by reason of
death or Permanent Disability, then all shares at the time subject to the   
option shall immediately vest so that such option may, during the twelve    
(12)-month exercise period following such cessation of Board service, be    
exercised for any or all of those shares as fully vested shares of Common   
Stock.                                                                      

(iv) In no event shall the option remain exercisable after the        
expiration of the option term. Upon the expiration of the twelve (12)-month 
exercise period or (if earlier) upon the expiration of the option term, the 
option shall terminate and cease to be outstanding for any vested shares    
for which the option has not been exercised. However, the option shall,     
immediately upon the Optionee's cessation of Board service for any reason   
other than death or Permanent Disability, terminate and cease to be         
outstanding to the extent the option is not otherwise at that time          
exercisable for vested shares.                                              

II. Corporate Transaction/Change in Control/Hostile Take-Over                   

A. In the event of a Corporate Transaction while the Optionee remains a   
Board member, the shares of Common Stock at the time subject to each            
outstanding option held by such Optionee under this Automatic Option Grant      
Program but not otherwise vested shall automatically vest in full so that each  
such option shall, immediately prior to the effective date of the Corporate     
Transaction, become exercisable for all the option shares as fully vested       
shares of Common Stock and may be exercised for any or all of those vested      
shares. Immediately following the consummation of the Corporate Transaction,    
each automatic option grant shall terminate and cease to be outstanding, except 
to the extent assumed by the successor corporation (or parent thereof).         

B. In the event of a Change in Control while the Optionee remains a Board 
member, the shares of Common Stock at the time subject to each outstanding      
option held by such Optionee under this Automatic Option Grant Program but not  
otherwise vested shall automatically vest in full so that each such option      
shall, immediately prior to the effective date of the Change in Control, become 
exercisable for all the option shares as fully vested shares of Common Stock    
and may be exercised for any or all of those vested shares. Each such option    
shall remain exercisable for such fully vested option shares until the          
expiration or sooner termination of the option term or the surrender of the     
option in connection with a Hostile Take-Over.                                  

 C. All outstanding repurchase rights under this under this Automatic Option
Grant Program shall automatically terminate, and the shares of Common Stock     
subject to those terminated rights shall immediately vest in full, in the event 
of any Corporate Transaction or Change in Control.                              

D. Upon the occurrence of a Hostile Take-Over while the Optionee remains a
Board member, such Optionee shall have a thirty (30)-day period in which to     
surrender to the Corporation each of his or her outstanding options under this  
Automatic Option Grant Program. The Optionee shall in return be entitled to a   
cash distribution from the Corporation in an amount equal to the excess of (i)  
the Take-Over Price of the shares                                               

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of Common Stock at the time subject to each surrendered option (whether or not  
the Optionee is otherwise at the time vested in those shares) over (ii) the     
aggregate exercise price payable for such shares. Such cash distribution shall  
be paid within five (5) days following the surrender of the option to the       
Corporation. No approval or consent of the Board or any Plan Administrator      
shall be required at the time of the actual option surrender and cash           
distribution.                                                                   

E. Each option which is assumed in connection with a Corporate Transaction
shall be appropriately adjusted, immediately after such Corporate Transaction,  
to apply to the number and class of securities which would have been issuable   
to the Optionee in consummation of such Corporate Transaction had the option    
been exercised immediately prior to such Corporate Transaction. Appropriate     
adjustments shall also be made to the exercise price payable per share under    
each outstanding option, provided the aggregate exercise price payable for such 
securities shall remain the same. To the extent the actual holders of the       
Corporation's outstanding Common Stock receive cash consideration for their     
Common Stock in consummation of the Corporate Transaction, the successor        
corporation may, in connection with the assumption of the outstanding options   
under the Automatic Option Grant Program, substitute one or more shares of its  
own common stock with a fair market value equivalent to the cash consideration  
paid per share of Common Stock in such Corporate Transaction.                   

  F. The grant of options under the Automatic Option Grant Program shall in no
way affect the right of the Corporation to adjust, reclassify, reorganize or    
otherwise change its capital or business structure or to merge, consolidate,    
dissolve, liquidate or sell or transfer all or any part of its business or      
assets.                                                                         

III. Remaining Terms                                                            

 The remaining terms of each option granted under the Automatic Option Grant
Program shall be the same as the terms in effect for option grants made under   
the Discretionary Option Grant Program.                                         

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ARTICLE FIVE

MISCELLANEOUS 

I. Financing                                                                    

The Plan Administrator may permit any Optionee or Participant to pay the  
option exercise price under the Discretionary Option Grant Program or the       
purchase price of shares issued under the Stock Issuance Program by delivering  
a full-recourse, interest-bearing promissory note payable in one or more        
installments. The terms of any such promissory note (including the interest     
rate and the terms of repayment) shall be established by the Plan Administrator 
in its sole discretion. In no event may the maximum credit available to the     
Optionee or Participant exceed the sum of (i) the aggregate option exercise     
price or purchase price payable for the purchased shares (less the par value of 
such shares) plus (ii) any Federal, state and local income and employment tax   
liability incurred by the Optionee or the Participant in connection with the    
option exercise or share purchase.                                              

II. Tax Withholding                                                             

A. The Corporation's obligation to deliver shares of Common Stock upon the
exercise of options or the issuance or vesting of such shares under the Plan    
shall be subject to the satisfaction of all applicable Federal, state and local 
income and employment tax withholding requirements.                             

  B. The Plan Administrator may, in its discretion, provide any or all holders
of Non-Statutory Options or unvested shares of Common Stock under the Plan      
(other than the options granted or the shares issued under the Automatic Option 
Grant Program) with the right to use shares of Common Stock in satisfaction of  
all or part of the Withholding Taxes to which such holders may become subject   
in connection with the exercise of their options or the vesting of their        
shares. Such right may be provided to any such holder in either or both of the  
following formats:                                                              

Stock Withholding: The election to have the Corporation withhold, from the
shares of Common Stock otherwise issuable upon the exercise of such Non-        
Statutory Option or the vesting of such shares, a portion of those shares with  
an aggregate Fair Market Value equal to the percentage of the Withholding Taxes 
(not to exceed one hundred percent (100%)) designated by the holder.            

 Stock Delivery: The election to deliver to the Corporation, at the time the
Non-Statutory Option is exercised or the shares vest, one or more shares of     
Common Stock previously acquired by such holder (other than in connection with  
the option exercise or share vesting triggering the Withholding Taxes) with an  
aggregate Fair Market Value equal to the percentage of the Withholding Taxes    
(not to exceed one hundred percent (100%)) designated by the holder.            

III. Effective Date and Term of the Plan                                        

A. The Plan shall become effective on the Plan Effective Date. Options may
be granted under the Discretionary Option Grant at any time on or after the     
Plan Effective Date, and the initial option grants under the Automatic Option   
Grant Program shall also be made on the Plan Effective Date to any non-employee 
Board members eligible for such grants at that time. However, no options        
granted under the Plan may be exercised, and no shares shall be issued under    
the Plan, until the Plan is approved by the Corporation's stockholders. If such 
stockholder approval is not obtained within twelve (12) months after the date   
the Plan is first adopted by the Board, then all options previously granted     
under this Plan shall terminate and cease to be outstanding, and no further     
options shall be granted and no shares shall be issued under the Plan.          

B. The Plan shall serve as the successor to the Predecessor Plans, and no 
further option grants or direct stock issuances shall be made under the         
Predecessor Plans after the Effective Time. All options outstanding under the   
Predecessor Plans on the Plan Effective Date shall be transferred to the Plan   
at that time and shall be                                                       

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treated as outstanding options under the Plan. However, each outstanding option 
so transferred shall continue to be governed solely by the terms of the         
documents evidencing such option, and no provision of the Plan shall be deemed  
to affect or otherwise modify the rights or obligations of the holders of such  
transferred options with respect to their acquisition of shares of Common       
Stock.                                                                          

C. One or more provisions of the Plan, including (without limitation) the 
option/vesting acceleration provisions of Article Two relating to Corporate     
Transactions and Changes in Control, may, in the Plan Administrator's           
discretion, be extended to one or more options incorporated from the            
Predecessor Plans which do not otherwise contain such provisions.               

D. The Plan shall terminate upon the earliest to occur of (i) the tenth   
anniversary of the Plan Effective Date, (ii) the date on which all shares       
available for issuance under the Plan shall have been issued as fully vested    
shares or (iii) the termination of all outstanding options in connection with a 
Corporate Transaction. Should the Plan terminate on the tenth anniversary of    
the Plan Effective Date, then all option grants and unvested stock issuances    
outstanding at that time shall continue to have force and effect in accordance  
with the provisions of the documents evidencing such grants or issuances.       

IV. Amendment of the Plan                                                       

 A. The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects. However, no such amendment or        
modification shall adversely affect the rights and obligations with respect to  
stock options or unvested stock issuances at the time outstanding under the     
Plan unless the Optionee or the Participant consents to such amendment or       
modification. In addition, certain amendments may require stockholder approval  
pursuant to applicable laws or regulations.                                     

B. Options to purchase shares of Common Stock may be granted under the    
Discretionary Option Grant Program and shares of Common Stock may be issued     
under the Stock Issuance Program that are in each instance in excess of the     
number of shares then available for issuance under the Plan, provided any       
excess shares actually issued under those programs shall be held in escrow      
until there is obtained stockholder approval of an amendment sufficiently       
increasing the number of shares of Common Stock available for issuance under    
the Plan. If such stockholder approval is not obtained within twelve (12)       
months after the date the first such excess issuances are made, then (i) any    
unexercised options granted on the basis of such excess shares shall terminate  
and cease to be outstanding and (ii) the Corporation shall promptly refund to   
the Optionees and the Participants the exercise or purchase price paid for any  
excess shares issued under the Plan and held in escrow, together with interest  
(at the applicable Short Term Federal Rate) for the period the shares were held 
in escrow, and such shares shall thereupon be automatically cancelled and cease 
to be outstanding.                                                              

V. Use of Proceeds                                                              

Any cash proceeds received by the Corporation from the sale of shares of  
Common Stock under the Plan shall be used for general corporate purposes.       

VI. Regulatory Approvals                                                        

A. The implementation of the Plan, the granting of any stock option under 
the Plan and the issuance of any shares of Common Stock (i) upon the exercise   
of any granted option or (ii) under the Stock Issuance Program shall be subject 
to the Corporation's procurement of all approvals and permits required by       
regulatory authorities having jurisdiction over the Plan, the stock options     
granted under it and the shares of Common Stock issued pursuant to it.          

B. No shares of Common Stock or other assets shall be issued or delivered 
under the Plan unless and until there shall have been compliance with all       
applicable requirements of Federal and state securities laws, including the     
filing and effectiveness of the Form S-8 registration statement for the shares  
of Common Stock                                                                 

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issuable under the Plan, and all applicable listing requirements of any Stock   
Exchange (or the Nasdaq National Market, if applicable) on which Common Stock   
is then listed for trading.                                                     

VII. No Employment/Service Rights                                               

Nothing in the Plan shall confer upon the Optionee or the Participant any 
right to continue in Service for any period of specific duration or interfere   
with or otherwise restrict in any way the rights of the Corporation (or any     
Parent or Subsidiary employing or retaining such person) or of the Optionee or  
the Participant, which rights are hereby expressly reserved by each, to         
terminate such person's Service at any time for any reason, with or without     
cause.                                                                          

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APPENDIX

The following definitions shall be in effect under the Plan:              

A. Automatic Option Grant Program shall mean the automatic option grant   
program in effect under Article Four of the Plan.                               

B. Board shall mean the Corporation's Board of Directors.                 

C. Change in Control shall mean a change in ownership or control of the   
Corporation effected through either of the following transactions:              

(i) the acquisition, directly or indirectly by any person or related  
group of persons (other than the Corporation or a person that directly or   
indirectly controls, is controlled by, or is under common control with, the 
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of  
the 1934 Act) of securities possessing more than fifty percent (50%) of the 
total combined voting power of the Corporation's outstanding securities     
pursuant to a tender or exchange offer made directly to the Corporation's   
stockholders, or                                                            

(ii) a change in the composition of the Board over a period of thirty-
six (36) consecutive months or less such that a majority of the Board       
members ceases, by reason of one or more contested elections for Board      
membership, to be comprised of individuals who either (A) have been Board   
members continuously since the beginning of such period or (B) have been    
elected or nominated for election as Board members during such period by at 
least a majority of the Board members described in clause (A) who were      
still in office at the time the Board approved such election or nomination. 

D. Code shall mean the Internal Revenue Code of 1986, as amended.         

E. Common Stock shall mean the Corporation's common stock.                

F. Corporate Transaction shall mean either of the following stockholder-  
approved transactions to which the Corporation is a party:                      

(i) a merger, consolidation or other reorganization, unless securities
representing more than fifty percent (50%) of the total combined voting     
power of the voting securities of the successor corporation are immediately 
thereafter beneficially owned, directly or indirectly and in substantially  
the same proportion, by the persons who beneficially owned the              
Corporation's outstanding voting securities immediately prior to such       
transaction, or                                                             

  (ii) the sale, transfer or other disposition of all or substantially all
of the Corporation's assets in complete liquidation or dissolution of the   
Corporation.                                                                

  G. Corporation shall mean Ariel Corporation, a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock   
of Ariel Corporation which has by appropriate action assumed all outstanding    
obligations under the Plan.                                                     

H. Discretionary Option Grant Program shall mean the discretionary option 
grant program in effect under Article Two of the Plan.                          

  I. Employee shall mean an individual who is in the employ of the Corporation
(or any Parent or Subsidiary), subject to the control and direction of the      
employer entity as to both the work to be performed and the manner and method   
of performance.                                                                 

J. Exercise Date shall mean the date on which the Corporation shall have  
received written notice of the option exercise.                                 

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  K. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:                         

(i) If the Common Stock is at the time traded on the Nasdaq National  
Market, then the Fair Market Value shall be the closing selling price per   
share of Common Stock on the date in question, as such price is reported by 
the National Association of Securities Dealers on the Nasdaq National       
Market and published in The Wall Street Journal. If there is no closing     
selling price for the Common Stock on the date in question, then the Fair   
Market Value shall be the closing selling price on the last preceding date  
for which such quotation exists.                                            

(ii) If the Common Stock is at the time listed on any Stock Exchange, 
then the Fair Market Value shall be the closing selling price per share of  
Common Stock on the date in question on the Stock Exchange determined by    
the Plan Administrator to be the primary market for the Common Stock, as    
such price is officially quoted in the composite tape of transactions on    
such exchange and published in The Wall Street Journal. If there is no      
closing selling price for the Common Stock on the date in question, then    
the Fair Market Value shall be the closing selling price on the last        
preceding date for which such quotation exists.                             

(iii) If the Common Stock is at the time neither listed on any Stock  
Exchange nor traded on the Nasdaq National Market, then the Fair Market     
Value shall be determined by the Plan Administrator after taking into       
account such factors as the Plan Administrator shall deem appropriate.      

 L. Hostile Take-Over shall mean the acquisition, directly or indirectly, by
any person or related group of persons (other than the Corporation or a person  
that directly or indirectly controls, is controlled by, or is under common      
control with, the Corporation) of beneficial ownership (within the meaning of   
Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent    
(50%) of the total combined voting power of the Corporation's outstanding       
securities pursuant to a tender or exchange offer made directly to the          
Corporation's stockholders which the Board does not recommend such stockholders 
to accept.                                                                      

  M. Incentive Option shall mean an option which satisfies the requirements of
Code Section 422.                                                               

 N. Involuntary Termination shall mean the termination of the Service of any
individual which occurs by reason of:                                           

(i) such individual's involuntary dismissal or discharge by the       
Corporation (or any Parent or Subsidiary) for reasons other than            
Misconduct, or                                                              

(ii) such individual's voluntary resignation following (A) a change in
his or her position with the Corporation (or any Parent or Subsidiary)      
which materially reduces his or her duties and responsibilities or the      
level of management to which he or she reports, (B) a reduction in his or   
her level of compensation (including base salary, fringe benefits and       
target bonus under any corporate-performance based bonus or incentive       
programs) by more than fifteen percent (15%) or (C) a relocation of such    
individual's place of employment by more than fifty (50) miles, provided    
and only if such change, reduction or relocation is effected by the         
Corporation without the individual's written consent.                       

  O. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by the Optionee or Participant, any unauthorized use or disclosure   
by such person of confidential information or trade secrets of the Corporation  
(or any Parent or Subsidiary), or any other intentional misconduct by such      
person adversely affecting the business or affairs of the Corporation (or any   
Parent or Subsidiary) in a material manner. The foregoing definition shall not  
in any way preclude or restrict the right of the Corporation (or any Parent or  
Subsidiary) to discharge or dismiss any Optionee, Participant or other person   
in the Service of the Corporation (or any Parent or Subsidiary) for any other   
acts or omissions, but such other acts or omissions shall not be deemed, for    
purposes of the Plan, to constitute grounds for termination for Misconduct.     

P. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.   

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Q. Non-Statutory Option shall mean an option not intended to satisfy the  
requirements of Code Section 422.                                               

R. Optionee shall mean any person to whom an option is granted under the  
Discretionary Option Grant or Automatic Option Grant Program.                   

S. Parent shall mean any corporation (other than the Corporation) in an   
unbroken chain of corporations ending with the Corporation, provided each       
corporation in the unbroken chain (other than the Corporation) owns, at the     
time of the determination, stock possessing fifty percent (50%) or more of the  
total combined voting power of all classes of stock in one of the other         
corporations in such chain.                                                     

T. Participant shall mean any person who is issued shares of Common Stock 
under the Stock Issuance Program.                                               

 U. Permanent Disability or Permanently Disabled shall mean the inability of
the Optionee or the Participant to engage in any substantial gainful activity   
by reason of any medically determinable physical or mental impairment expected  
to result in death or to be of continuous duration of twelve (12) months or     
more. However, solely for purposes of the Automatic Option Grant Program,       
Permanent Disability or Permanently Disabled shall mean the inability of the    
non-employee Board member to perform his or her usual duties as a Board member  
by reason of any medically determinable physical or mental impairment expected  
to result in death or to be of continuous duration of twelve (12) months or     
more.                                                                           

V. Plan shall mean the Ariel Corporation 2001 Stock Incentive Plan, as set
forth in this document.                                                         

 W. Plan Administrator shall mean the particular entity, whether the Primary
Committee, the Board or the Secondary Committee, which is authorized to         
administer the Discretionary Option Grant and Stock Issuance Programs with      
respect to one or more classes of eligible persons, to the extent such entity   
is carrying out its administrative functions under those programs with respect  
to the persons under its jurisdiction.                                          

X. Plan Effective Date shall mean the date the merger of Mayan Networks   
Corporation with and into the Corporation becomes effective pursuant to the     
Agreement and Plan of Merger between those entities dated March      , 2001.    

Y. Predecessor Plans shall mean the following equity incentive plans: (i) 
the Ariel Corporation 1992 Stock Option and Restricted Stock Plan, (ii) the     
Ariel Corporation 1994 Stock Option Plan, (iii) the Ariel Corporation 1995      
Stock Option Plan, (iv) the Ariel Corporation 1996 Directors Stock Option Plan  
and (v) the Mayan Networks Corporation 1998 Stock Option/Stock Issuance Plan,   
as each such plan is in effect immediately prior to the Plan Effective Date.    

Z. Primary Committee shall mean the committee of two (2) or more non-     
employee Board members appointed by the Board to administer the Discretionary   
Option Grant and Stock Issuance Programs with respect to Section 16 Insiders.   

 AA. Secondary Committee shall mean a committee of one or more Board members
appointed by the Board to administer the Discretionary Option Grant and Stock   
Issuance Programs with respect to eligible persons other than Section 16        
Insiders.                                                                       

 BB. Section 16 Insider shall mean an officer or director of the Corporation
subject to the short-swing profit liabilities of Section 16 of the 1934 Act.    

CC. Service shall mean the performance of services for the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a non-    
employee member of the board of directors or a consultant or independent        
advisor, except to the extent otherwise specifically provided in the documents  
evidencing the option grant or stock issuance.                                  

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 DD. Stock Exchange shall mean either the American Stock Exchange or the New
York Stock Exchange.                                                            

EE. Stock Issuance Agreement shall mean the agreement entered into by the 
Corporation and the Participant at the time of issuance of shares of Common     
Stock under the Stock Issuance Program.                                         

FF. Stock Issuance Program shall mean the stock issuance program in effect
under Article Three of the Plan.                                                

  GG. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each    
corporation (other than the last corporation) in the unbroken chain owns, at    
the time of the determination, stock possessing fifty percent (50%) or more of  
the total combined voting power of all classes of stock in one of the other     
corporations in such chain.                                                     

 HH. Take-Over Price shall mean the greater of (i) the Fair Market Value per
share of Common Stock on the date the option is surrendered to the Corporation  
in connection with a Hostile Take-Over or (ii) the highest reported price per   
share of Common Stock paid by the tender offeror in effecting such Hostile      
Take-Over. However, if the surrendered option is an Incentive Option, the Take- 
Over Price shall not exceed the clause (i) price per share.                     

 II. 10% Stockholder shall mean the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined    
voting power of all classes of stock of the Corporation (or any Parent or       
Subsidiary).                                                                    

JJ. Withholding Taxes shall mean the Federal, state and local income and  
employment withholding taxes, determined in each instance at the minimum        
statutory rate, to which the holder of Non-Statutory Options or unvested shares 
of Common Stock may become subject in connection with the exercise of those     
options or the vesting of those shares.                                         

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                                                                    APPENDIX VII

[Needham & Company, Inc. Letterhead]

March 28, 2001                                                                  

The Board of Directors                                                          
Ariel Corporation                                                               
2540 Route 130                                                                  
Cranbury, NJ 08512                                                              

Members of the Board:                                                           

We understand that Ariel Corporation (the "Company") and Mayan Networks   
Corporation ("Mayan") propose to enter into an Agreement and Plan of Merger     
(the "Merger Agreement") pursuant to which Mayan will be merged with and into   
the Company, with the Company as the surviving corporation. Concurrently with   
the execution of the Merger Agreement, we understand that the Company and Mayan 
will enter into a bridge loan agreement pursuant to which Mayan will provide to 
the Company certain bridge financing (the "Bridge Loan"). The terms of the      
Merger and the Bridge Loan will be set forth more fully in the Merger Agreement 
and related documents.                                                          

Pursuant to the proposed Merger Agreement, we understand that at the      
Effective Time (as defined in the Merger Agreement), each outstanding share of  
common stock, $.0001 par value, of Mayan (the "Mayan Common Stock") will be     
converted into the right to receive such number of shares of common stock,      
$.001 par value, of the Company (the "Company Common Stock") equal to the       
Exchange Ratio set forth in the Merger Agreement (the "Exchange Ratio") such    
that immediately after the Merger the number of shares of Ariel Common Stock    
issued or issuable to former holders of Mayan Common Stock and holders of       
options and warrants to purchase Mayan Common Stock equals approximately 90% of 
the total number of shares of the Company Common Stock on a fully diluted basis 
(excluding for purposes of such calculation shares issuable upon conversion of  
Mayan's 5 1/2% Convertible Subordinated Notes due 2005).                        

You have asked us to advise you as to the fairness, from a financial point
of view, of the Exchange Ratio to the Company. Needham & Company, Inc., as part 
of its investment banking business, is regularly engaged in the valuation of    
businesses and their securities in connection with mergers and acquisitions,    
negotiated underwritings, secondary distributions of securities, private        
placements and other purposes. We have been engaged by the Company as financial 
advisor to render this opinion in connection with the Merger and will receive a 
fee for our services, none of which is contingent upon the consummation of the  
Merger. In addition, the Company has agreed to indemnify us for certain         
liabilities arising from our role as financial advisor and out of the rendering 
of this opinion.                                                                

For purposes of this opinion we have, among other things: (i) reviewed a  
draft of the Merger Agreement dated March 28, 2001, (ii) reviewed certain       
publicly available information concerning the Company and certain other         
relevant financial and operating data of the Company and Mayan furnished to us  
by the Company and Mayan; (iii) held discussions with members of management of  
the Company and Mayan concerning their current and future business prospects;   
(iv) reviewed and discussed with the management of the Company and Mayan        
certain historical financial statements and financial forecasts and projections 
prepared by such respective management teams; (v) reviewed the historical stock 
prices and trading volumes of the Company Common Stock; (vi) compared certain   
publicly available financial data of companies whose securities are traded in   
the public markets and that we deemed generally relevant to similar data for    
the Company and Mayan; (vii) reviewed the financial terms of certain other      
business combinations that we deemed generally relevant;                        

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The Board of Directors                                                          
Ariel Corporation                                                               
March 28, 2001                                                                  
Page 2                                                                          

(viii) performed and/or considered such other studies, analyses, inquiries and  
investigations as we deemed appropriate. In addition, we have held discussions  
with certain members of the Company's management concerning the Company's views 
as to: anticipated adverse effects on the Company's business, assets,           
liabilities, operations and prospects that the Company believes would occur if  
the Company were not to enter into the Merger Agreement and the Bridge Loan;    
the liquidity position of the Company and its ability to continue as a going    
concern; the Company's anticipated inability to remedy its liquidity shortfall  
and the substantial risk of the Company becoming insolvent and seeking the      
protection of state insolvency or federal bankruptcy law; the anticipated       
substantial adverse effects on the Company's stockholders and present and       
potential employees, business partners and lenders that would result from such  
insolvency or concerns about the potential for it; and the anticipated benefits 
that would arise from entering into the Merger Agreement and the Bridge Loan,   
including the substantial lessening of such liquidity and solvency concerns.    

In connection with our review and in arriving at our opinion, we have     
assumed and relied on the accuracy and completeness of all of the financial and 
other information publicly available or furnished to or otherwise reviewed by   
or discussed with us for purposes of rendering this opinion and have neither    
attempted to verify independently nor assumed responsibility for verifying any  
of such information. In addition, we have assumed, with your consent (i) that   
the Merger will be accounted for as a purchase for financial reporting          
purposes; (ii) that the Merger will qualify as a reorganization within the      
meaning of Section 368(a) of the Internal Revenue Code of 1986, (iii) any       
material liabilities (contingent or otherwise, known or unknown) of the Company 
and Mayan are set forth in the consolidated financial statements of the Company 
and Mayan, respectively; (iv) the terms set forth in the executed Merger        
Agreement will not differ materially from the proposed terms provided to us in  
the draft Merger Agreement dated March 28, 2001; (v) that the Aggregate Share   
Number (as defined in the Merger Agreement) will be no greater than             
169,500,000; and (vi) the Merger would be consummated on a timely basis in the  
manner contemplated in the Merger Agreement. With respect to the Company's and  
Mayan's financial forecasts and information relating to the joint prospects of  
the combined companies, we have assumed for purposes of our opinion that such   
forecasts and information have been reasonably prepared on bases reflecting the 
best currently available estimates and judgments of management of the Company   
and Mayan of the future operating and financial performance of the Company and  
Mayan and the combined companies. We express no opinion with respect to such    
forecasts or information or the assumptions on which they were based. We have   
not assumed any responsibility for or made or obtained an independent           
evaluation, appraisal or physical inspection of the assets or liabilities of    
the Company and Mayan. Further, our opinion is based on economic, monetary and  
market conditions as they exist and can be evaluated as of the date hereof. Our 
opinion as expressed herein is limited to the fairness, from a financial point  
of view, to the Company of the Exchange Ratio and does not address the          
Company's underlying business decision to engage in the Merger, the relative    
merits of the Merger as compared to any alternative business strategies that    
might exist for the Company, or the effect of any other transaction in which    
the Company might engage. Our opinion does not constitute a recommendation to   
any stockholder of the Company as to how such stockholder should vote on the    
proposed Merger.                                                                

We are not expressing any opinion as to what the value of Company Common  
Stock will be when issued pursuant to the Merger or the price at which Company  
Common Stock will trade at any time. We express no opinion as to the Company's  
solvency nor are we expressing any opinion on the Company's ability to continue 
as a going concern should the Merger not be consummated.                        

In the ordinary course of our business, we may actively trade the equity  
securities of the Company for our own account and for the accounts of customers 
and, accordingly, may at any time hold a long or short position in such         
securities. We have in the past provided financial advisory services to the     
Company unrelated to the proposed Merger, and have received compensation for    
those services.                                                                 

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The Board of Directors                                                          
Ariel Corporation                                                               
March 28, 2001                                                                  
Page 3                                                                          

  This letter and the opinion expressed herein are provided at the request and
for the information of the Board of Directors of the Company and may not be     
quoted or referred to or used for any other purpose without our prior written   
consent, except that this letter may be disclosed in connection with any        
registration statement or proxy statement used in connection with the Merger so 
long as this letter is quoted in full in such registration statement or proxy   
statement.                                                                      

Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio is fair to the Company from a financial point   
of view.                                                                        

                     Very truly yours,

                               /s/ Needham & Company, Inc.

                           Needham & Company, Inc.

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                                                                   APPENDIX VIII

March 28, 2001

Special Committee of the Board of Directors of MAYAN Networks Corporation       
2115 O'Nel Drive                                                                
San Jose, CA 95131                                                              

Members of the Special Committee:                                               

We understand that MAYAN Networks Corporation (the "Company") and Ariel   
Corporation ("Acquiror") are proposing to enter into an Agreement and Plan of   
Merger (the "Agreement") which will provide, among other things, for the merger 
(the "Merger") of the Company with and into the Acquiror. Upon consummation of  
the Merger, the separate corporate existence of the Company shall cease and     
Acquiror shall continue as the surviving corporation. Under the terms, and      
subject to the conditions, set forth in a draft of the Agreement dated March    
27, 2001 (the "Draft Agreement"), at the effective time of the Merger, the      
outstanding shares of common stock of the Company, par value $0.0001 per share, 
as well as outstanding shares of preferred stock of the Company, par value      
$0.0001 per share, on an as-converted basis ("Company Common Stock") other than 
certain shares to be canceled pursuant to the Agreement, will be converted into 
the right to receive up to 168,305,346 shares, as adjusted pursuant to the      
Draft Agreement, of the common stock of Acquiror, par value $0.001 per share    
("Acquiror Common Stock"). The Exchange Ratio shall be the quotient obtained by 
dividing 168,305,346 shares, as adjusted pursuant to the Draft Agreement, of    
Acquiror Common Stock by the Aggregate Common Number, as such term is defined   
in the Draft Agreement. The terms and conditions of the Merger are set out more 
fully in the Draft Agreement.                                                   

  You have asked us whether, in our opinion, the Exchange Ratio is fair from a
financial point of view and as of the date hereof to the "Holders of Company    
Common Stock." The "Holders of Company Common Stock" shall be defined as all    
holders of Company Common Stock other than Acquiror, any affiliates of Acquiror 
or any holders of Company Common Stock who are officers or directors (or who    
have representatives serving as directors) of the Company.                      

For purposes of this opinion we have, among other things:                 

(i)    reviewed certain publicly available financial statements and other   
business and financial information of Acquiror;               

(ii)   reviewed certain internal financial statements and other financial   
     and operating data, including certain financial forecasts and other
     forward looking information, concerning (a) the Company prepared by
the management of the Company and (b) Acquiror prepared by the
managements of Acquiror and the Company, respectively;        

(iii)  held discussions with the respective managements of the Company and  
  Acquiror concerning the businesses, past and current operations,
  financial condition and future prospects of both the Company and
      Acquiror, independently and combined, including discussions with the
     managements of the Company and Acquiror concerning cost savings and
     other synergies that are expected to result from the Merger as well
  as their views regarding the strategic rationale for the Merger;

(iv)   reviewed the financial terms and conditions set forth in the Draft   
Agreement;                                                    

(v)    reviewed the stock price and trading history of Acquiror Common      
Stock;                                                        

(vi)   compared the financial performance of the Company and Acquiror and   
    the prices and trading activity of Acquiror Common Stock with that
of certain other publicly traded companies comparable with the
Company and Acquiror, respectively;                           

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(vii)  compared the financial terms of the Merger with the financial terms, 
 to the extent publicly available, of other transactions that we
deemed relevant;                                              

(viii) reviewed the pro forma impact of the Merger on the Company's revenue 
per share and cash earnings per share;                        

(ix)   prepared an analysis of the relative contributions of the Company    
and Acquiror to the combined company;                         

(x)    made such other studies and inquiries, and reviewed such other data, 
as we deemed relevant.                                        

 In our review and analysis, and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other 
information provided to us (including information furnished to us orally or     
otherwise discussed with us by managements of the Company and Acquiror) or      
publicly available and have neither attempted to verify, nor assumed            
responsibility for verifying, any of such information. We have relied upon the  
assurances of the managements of the Company and Acquiror that they are not     
aware of any facts that would make such information inaccurate or misleading.   
Furthermore, we did not obtain or make, or assume any responsibility for        
obtaining or making, any independent evaluation or appraisal of the properties, 
assets or liabilities (contingent or otherwise) of the Company or Acquiror, nor 
were we furnished with any such evaluation or appraisal. With respect to the    
financial forecasts and projections (and the assumptions and bases therefor)    
for Acquiror and the Company (including projections with respect to operations  
of the combined companies following the Merger) that we have reviewed, we have  
assumed that such forecasts and projections have been reasonably prepared in    
good faith on the basis of reasonable assumptions and reflect the best          
currently available estimates and judgments of the managements of Acquiror and  
Company, respectively, as to the future financial condition and performance of  
the Company and Acquiror, respectively, and we have further assumed that such   
projections and forecasts will be realized in the amounts and in the time       
periods currently estimated. We have assumed that the Merger will be            
consummated upon the terms set forth in the Draft Agreement without material    
alteration thereof, including, among other things, that the Merger will be      
accounted for as a "purchase method" business combination in accordance with    
U.S. generally accepted accounting principles ("GAAP") and that the Merger will 
be treated as a tax-free reorganization pursuant to the Internal Revenue Code   
of 1986, as amended. In addition, we have assumed that the historical financial 
statements of each of the Company and Acquiror reviewed by us have been         
prepared and fairly presented in accordance with U.S. GAAP consistently         
applied. We understand that the trading price of Acquiror Common Stock has      
periodically over the past several months fallen below the minimum bid price as 
required by Nasdaq Marketplace Rule 4310(c)(4). As such, we have made no        
assumptions relating to a possible delisting of Acquiror Common Stock in        
performing our analysis.                                                        

  This opinion is necessarily based upon market, economic and other conditions
as in effect on, and information made available to us as of, the date hereof.   
We have assumed with your consent for purposes of our analysis that the value   
of the common stock of Acquiror to be received in the proposed Merger is equal  
to the closing trading price of the common stock of Acquiror as of March 27,    
2001, and we express no opinion or view on the value of the common stock of     
Acquiror. It should be understood that subsequent developments may affect the   
conclusion expressed in this opinion and that we disclaim any undertaking or    
obligation to advise any person of any change in any matter affecting this      
opinion which may come or be brought to our attention after the date of this    
opinion. Our opinion is limited to the fairness, from a financial point of view 
and as to the date hereof, to the Holders of Company Common Stock of the        
Exchange Ratio. We do not express any opinion as to (i) the value of any        
employee agreement or other arrangement entered into in connection with the     
Merger, (ii) any tax or other consequences that might result from the Merger or 
(iii) what the value of Acquiror Common Stock will be when issued to the        
Company's stockholders pursuant to the Merger or the price at which the shares  
of Acquiror Common Stock that are issued pursuant to the Merger may be traded   
in the future. Our opinion does not address the relative merits of the Merger   
and the other business strategies that the Company's Board of Directors or      
Special Committee has considered or may be considering, nor does it address the 
decision of the Company's Board of Directors to proceed with the Merger. Our    
opinion does not address any legal or accounting matters, as to which we        
understand that Acquiror obtained such advice as it deemed necessary from       
qualified professionals.                                                        

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  In connection with the preparation of our opinion, we were not authorized to
solicit, and did not solicit, third-parties regarding alternatives to the       
Merger.                                                                         

We are acting as financial advisor to the Company in connection with the  
Merger and will receive (i) a fee contingent upon the delivery of this opinion  
and (ii) an additional fee contingent upon the consummation of the Merger. In   
addition, the Company has agreed to indemnify us for certain liabilities that   
may arise out of our engagement. We acted as the placement agent for the        
Company's sale of $75,000,000 of convertible subordinated securities on October 
20, 2000. Pursuant to our role as placement agent and market maker in such      
securities, as of the date hereof, we hold a portion of such securities worth   
approximately $5,000,000. In the ordinary course of business, we may trade in   
Acquiror's securities for our own account and the account of our customers and, 
accordingly, may at any time hold a long or short position in Acquiror's        
securities.                                                                     

 Our opinion expressed herein is provided for the information of the Special
Committee of the Board of Directors of the Company in connection with its       
evaluation of the Merger. Our opinion is not intended to be and does not        
constitute a recommendation to any stockholder of the Company or Acquiror as to 
how such stockholder should vote, or take any other action, with respect to the 
Merger. This opinion may not be summarized, described or referred to or         
furnished to any party except with our express prior written consent.           

Based upon and subject to the foregoing considerations, it is our opinion 
that, as of the date hereof, the Exchange Ratio is fair to the Holders of       
Company Common Stock from a financial point of view.                            

                     Very truly yours,

                            ROBERTSON STEPHENS, INC.

                                /s/ Robertson Stephens, Inc.
                                         -------------------------------------

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                                                                     APPENDIX IX

(Form of Proxy) 
Ariel Corporation 
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS--           , 2001
(This Proxy is solicited by the Board of Directors of the Company)

The undersigned stockholder of Ariel Corporation hereby appoints            
             and                      , and each of them, with full power of
substitution, proxies to vote the shares of stock which the undersigned could   
vote if personally present at the Special Meeting of Stockholders of Ariel      
Corporation to be held at            a.m., local time, on                  ,    
2001, at                                                 .                      

1. APPROVAL OF THE MERGER AGREEMENT AMONG ARIEL CORPORATION AND MAYAN       
NETWORKS CORPORATION.                                                 

[_] FOR         [_] AGAINST        [_] ABSTAIN

2. APPROVAL AND ADOPTION OF AN AMENDMENT TO ARIEL'S RESTATED CERTIFICATE OF 
   INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
 FROM         TO        , AFTER GIVING EFFECT TO THE ONE FOR     REVERSE
   STOCK SPLIT WHICH IS EXPECTED TO OCCUR IMMEDIATELY PRIOR TO THE EFFECTIVE
TIME OF THE MERGER, AND TO EFFECT THE ONE FOR    REVERSE SPLIT OF THE 
  ARIEL'S COMMON STOCK, TO BE EFFECTIVE IMMEDIATELY PRIOR TO THE EFFECTIVE
TIME OF THE MERGER.                                                   

[_] FOR         [_] AGAINST        [_] ABSTAIN

3. APPROVAL OF THE IMPLEMENTATION OF THE 2001 STOCK INCENTIVE PLAN.         

[_] FOR         [_] AGAINST        [_] ABSTAIN

4. ELECTION OF ARIEL DIRECTORS: MESSRS. AGNELLO, GOEI, PAUL, BURLINSON,     
FUCHS, SCHNEIDER AND ATLAS.                                           

[_] FOR ALL NOMINEES     [_] WITHHOLD AUTHORITY TO                        
VOTE     [_] EXCEPTIONS*                                                  

* INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, 
MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE  
PROVIDED.                                                             

5. IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE  
THE MEETING.                                                          

UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1,      
PROPOSAL 2, PROPOSAL 3 AND PROPOSAL 4.                                    

Please date and sign exactly as your name appears on the envelope in  
which this material was mailed. If shares are held jointly, each          
stockholder should sign. Executors, administrators, trustees, etc. should 
use full title and, if more than one, all should sign. If the stockholder 
is a corporation, please sign full corporate name by an authorized        
officer. If the stockholder is a partnership, please sign full partnership
name by an authorized person.                                             

                                ----------------------
                    Name(s) of
                     Stockholder

                                ----------------------
                         Signature(s) of
                     Stockholder

                                Dated: _______________

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                                                                      APPENDIX X

(Form of Proxy) 
MAYAN NETWORKS CORPORATION
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS--            , 2001 
(This Proxy is solicited by the Board of Directors of the Company)

The undersigned shareholder of MAYAN Networks Corporation hereby appoints   
                  and                      , and each of them, with full power
of substitution, proxies to vote the shares of stock which the undersigned      
could vote if personally present at the Special Meeting of Shareholders of      
MAYAN Networks Corporation to be held at            a.m., local time, on        
              2001, at                                                 .

1. APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AMONG ARIEL CORPORATION AND
MAYAN NETWORKS CORPORATION.                                           

[_] FOR      [_] AGAINST      [_] ABSTAIN 

2. FOR THE HOLDERS OF MAYAN PREFERRED STOCK, VOTING SEPARATELY FOR EACH     
SERIES OF PREFERRED STOCK, APPROVAL OF THE VOLUNTARY CONVERSION OF    
PREFERRED STOCK INTO COMMON STOCK PURSUANT TO ARTICLE III, SECTION    
B(4)(B)(II) OF MAYAN'S AMENDED AND RESTATED ARTICLES OF INCORPORATION.

[_] FOR      [_] AGAINST      [_] ABSTAIN 

UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND   
PROPOSAL 2.                                                               

Please date and sign exactly as your name appears on the envelope in which
this material was mailed. If shares are held jointly, each shareholder    
should sign. Executors, administrators, trustees, etc. should use full    
title and, if more than one, all should sign. If the shareholder is a     
corporation, please sign full corporate name by an authorized officer. If 
the shareholder is a partnership, please sign full partnership name by an 
authorized person.                                                        

                                ----------------------
                    Name(s) of
                     Stockholder

                                ----------------------
                         Signature(s) of
                     Stockholder

                                Dated: _______________

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PART II 

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers                              

 Section 145 of the Delaware General Corporation Law permits indemnification
of officers, directors and other corporate agents under certain circumstances   
and subject to certain limitations. Section 145 of the Delaware General         
Corporation Law permits indemnification of officers, directors and other        
corporate agents under certain circumstances and subject to certain             
limitations. The Registrant's Restated Certificate of Incorporation and         
Restated Bylaws provide that the Registrant shall indemnify its directors,      
officers, employees and agents to the fullest extent permitted by Delaware      
General Corporation Law, including in circumstances in which indemnification is 
otherwise discretionary under Delaware law. The Registrant also intends to      
maintain director and officer liability insurance.                              

Item 21. Exhibits and Financial Statement Schedules                             

                                                                [Download Table]

Exhibit                                                                       
Number                          Description of Document                       
-------                         -----------------------                       
                                                                              
 2.1(1) Agreement and Plan of Merger by and between Ariel Corporation and     
         MAYAN Networks Corporation                                           

 3.1(2) Restated Certificate of Incorporation                                 

 3.2(2) Certificate of Amendment of Certificate of Incorporation              

 3.3(2) Restated Bylaws                                                       

 5.1*   Opinion of Paul & Rosen LLP regarding the validity of the securities  
         to be issued                                                         

 8.1*   Opinion of Brobeck, Phleger & Harrison LLP regarding certain tax      
         aspects of the merger                                                

 9.1(3) Parent Voting Agreement between MAYAN Networks Corporation and certain
         stockholders of Ariel Corporation                                    

 9.2    Form of Company Voting Agreement between Ariel Corporation and certain
         shareholders of MAYAN Networks Corporation (attached as Appendix III 
         to the Joint Proxy Statement/Prospectus forming part of this         
         registration statement)                                              

10.1(2) 1994 Stock Option Plan                                                

10.2(4) 1995 Stock Option Plan                                                

10.3(5) 1996 Stock Option Plan                                                

10.4(4) Lease for Cranbury premises                                           

10.5    Lease Extension for Cranbury premises                                 

10.6    Employment Agreement of Dennis Schneider dated May 2000               

10.7    Form of Market Standoff Agreement (attached as Appendix V to the Joint
         Proxy Statement/ Prospectus forming a part of this registration      
         statement)                                                           

10.8    Form of Employment Agreement (attached as Appendix IV to the Joint    
         Proxy Statement/Prospectus forming a part of this registration       
         statement)                                                           

10.9    Form of Ariel Corporation 2001 Stock Incentive Plan (attached as      
         Appendix VI to the Joint Proxy Statement/Prospectus forming part of  
         this registration statement)                                         

10.10   Form of Promissory Note, dated March 28, 2001, by Ariel Corporation,  
         as borrower, to MAYAN Networks Corporation, as lender                

10.11   Form of Security Agreement between Ariel Corporation and MAYAN        
         Networks Corporation                                                 

10.12   Form of Intellectual Property Security Agreement between Ariel        
         Corporation and MAYAN Networks Corporation                           

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                                                                [Download Table]

Exhibit                                                                     
Number                         Description of Document                      
-------                        -----------------------                      
                                                                            
21.1    Subsidiaries of Ariel Corporation                                   

23.1    Consent of PricewaterhouseCoopers LLP, Independent Accountants      

23.2*   Consent of Paul & Rosen LLP (included in Exhibit 5.1)               

23.3    Consent of Deloitte & Touche LLP                                    

23.4*   Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 8.1)

24.1    Power of Attorney (See Signature Page)                              

99.1    Consent of Needham & Company, Inc., financial advisor to Ariel      
         Corporation                                                        

99.2    Consent of Robertson Stephens, Inc., financial advisor to MAYAN     
         Networks Corporation                                               

--------                                                                        
*   To be filed by amendment                                                  

(1)  Previously filed as an exhibit to the Form 8-K filed with the Commission   
  by the Registrant on April 5, 2001 and incorporated herein by reference.

(2)  Previously filed as an exhibit to the registration statement, File No. 33- 
87286, and incorporated herein by reference.                          

(3)  Previously filed as an exhibit to Form 13D filed with the Commission by    
the Registrant on April 9, 2001 and incorporated herein by reference. 

(4)  Previously filed as an exhibit to the registration statement, File No. 33- 
99814, and incorporated herein by reference.                          

(5)  Previously filed as an exhibit to the registration statement, File No.     
333-5196, and incorporated herein by reference.                       

Item 22. Undertakings                                                           

(1) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a   
prospectus which is a part of this registration statement, by any person or     
party who is deemed to be an underwriter within the meaning of Rule 145(c), the 
issuer undertakes that such reoffering prospectus will contain the information  
called for by the applicable registration form with respect to reofferings by   
persons who may be deemed underwriters, in addition to the information called   
for by the other items of the applicable form.                                  

  (2) The undersigned registrant undertakes that every prospectus: (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to 
meet the requirements of Section 10(a)(3) of the Act and is used in connection  
with an offering of securities subject to Rule 415, will be filed as a part of  
an amendment to the registration statement and will not be used until such      
amendment is effective, and that, for purposes of determining any liability     
under the Securities Act of 1933, each such post-effective amendment 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.                                         

 (3) 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 foregoing provisions, 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, 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.                       

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 (4) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to   
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of    
such request, and to send the incorporated documents by first class mail or     
other equally prompt means. This includes information contained in documents    
filed subsequent to the effective date of the registration statement through    
the date of responding to the request.                                          

(5) The undersigned registrant hereby undertakes to supply by means of a  
post-effective amendment all information concerning a transaction, and the      
company being acquired involved therein, that was not the subject of and        
included in the registration statement when it became effective.                

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SIGNATURES

 Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the            
undersigned, thereunto duly authorized, in the city of Cranbury, state of       
New Jersey, on May 25, 2001.                                                    

                     ARIEL CORPORATION
                    (Registrant)

                                        /s/ Dennis Schneider
                                         By: _________________________________
                                           Dennis Schneider,
                                           Chief Executive Officer

POWER OF ATTORNEY 

  KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, jointly and severally, Dennis Schneider and     
John R. Loprete, and each one of them, his true and lawful attorneys-in-fact    
and agents, each with full power of substitution, for him and in his name,      
place and stead, in any and all capacities, to sign any and all amendments      
(including post-effective amendments) to this registration statement, and to    
sign any registration statement for the same offering covered by this           
registration statement, that is to be effective upon filing under Rule 462(b)   
promulgated under the Securities Act of 1933, as amended, and all post-         
effective amendments thereto, and to file the same, with all exhibits thereto   
and all documents in connection therewith, with the Securities and Exchange     
Commission, granting unto said attorneys-in-fact and agents, and each of them   
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 might or could do in person, hereby ratifying and    
confirming that each of said attorneys-in-fact and agents or any of them, or    
his or their 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 by the following persons in the          
capacities and on the dates indicated.                                          

                                                                [Download Table]

             Signature                           Title                 Date    
             ---------                           -----                 ----    

                                                                               
      /s/ Dennis Schneider           President, Principal          May 25, 2001
____________________________________  Executive Officer and                    
          Dennis Schneider            Director                                 

       /s/ John R. Loprete           Vice President--Finance,      May 25, 2001
____________________________________  Principal Financial Officer              
          John R. Loprete             and Accounting Officer                   

       /s/ Harold W. Paul            Director                      May 25, 2001
____________________________________                                           
           Harold W. Paul                                                      

       /s/ Esmond T. Goei            Director                      May 25, 2001
____________________________________                                           
           Esmond T. Goei                                                      

     /s/ Robert F. Burlinson         Director                      May 25, 2001
____________________________________                                           
        Robert F. Burlinson                                                    

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                                                                [Download Table]

             Signature                           Title                 Date    
             ---------                           -----                 ----    

                                                                               
        /s/ Ira H. Fuchs             Director                      May 24, 2001
____________________________________                                           
            Ira H. Fuchs                                                       

        /s/ Jay H. Atlas             Director                      May 25, 2001
____________________________________                                           
            Jay H. Atlas                                                       

     /s/ Anthony M. Agnello          Director                      May 25, 2001
____________________________________                                           
         Anthony M. Agnello                                                    

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