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                               JAVELIN SYSTEMS, INC.
                                          
                     SECOND AMENDED 1997 EQUITY INCENTIVE PLAN
                                          
                ADOPTED BY THE BOARD OF DIRECTORS SEPTEMBER 2, 1997
                                          
                                          
                   APPROVED BY THE STOCKHOLDERS DECEMBER 12, 1997
                                          
         AMENDED BY THE BOARD OF DIRECTORS MARCH 3, 1998 AND JUNE 25, 1998
                                          
              AMENDMENT APPROVED BY THE STOCKHOLDERS _________________
                                          

1.   PURPOSES.

     (a)  The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options and (iii) Stock Appreciation Rights, all as defined
below.

     (b)  The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.

     (c)  The Company intends that the Stock Awards issued under the Plan shall,
in the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be
either Options granted pursuant to Section 6 hereof, including Incentive Stock
Options and Nonstatutory Stock Options, or Stock Appreciation Rights granted
pursuant to Section 7 hereof.  All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and
in such form as issued pursuant to Section 6, and a separate certificate or
certificates will be issued for shares purchased on exercise of each type of
Option.

2.   DEFINITIONS.

     (a)  "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.

     (b)  "BOARD" means the Board of Directors of the Company.

     (c)  "CODE" means the Internal Revenue Code of 1986, as amended.

     (d)  "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.

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     (e)  "COMMON STOCK" means the shares of the Company's Common Stock, $.01
par value.

     (f)  "COMPANY" means Javelin Systems, Inc., a Delaware corporation.

     (g)  "CONCURRENT STOCK APPRECIATION RIGHT" or "CONCURRENT RIGHT" means a
right granted pursuant to subsection 7(b)(ii) of the Plan.

     (h)   "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.

     (i)  "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means that
the service of an individual to the Company, whether as an Employee, Director or
Consultant, is not interrupted or terminated.  The Board, in its sole
discretion, may determine whether Continuous Status as an Employee, Director or
Consultant shall be considered interrupted in the case of:  (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company, Affiliates or their
successors.

     (j)  "COVERED EMPLOYEE" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be reported to shareholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

     (k)  "DIRECTOR" means a member of the Board.

     (l)  "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company.  Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

     (m)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     (n)  "FAIR MARKET VALUE" means, as of any date, the fair market value of
the Common Stock of the Company determined in accordance with Section 6(b) of
the Plan or otherwise as determined by the Board pursuant to Rule 260.140.50 of
Title 10 of the California Code of Regulations.

     (o)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (p)  "INDEPENDENT STOCK APPRECIATION RIGHT" or "INDEPENDENT RIGHT" means a
right granted pursuant to subsection 7(b)(iii) of the Plan.

     (q)  "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company, or its parent or
subsidiary for services rendered as a 

                                     2.
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consultant or in any capacity other than as a Director (except for an amount 
as to which disclosure would not be required under Item 404(a) of Regulation 
S-K ("Regulation S-K") promulgated pursuant to the Securities Act of 1933, as 
amended (the "Securities Act"), does not possess an interest in any other 
transaction as to which disclosure would be required under Item 404(a) of 
Regulation S-K and is not engaged in a business relationship as to which 
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is 
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

     (r)  "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.

     (s)  "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     (t)  "OPTION" means a stock option granted pursuant to the Plan.

     (u)  "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant. 
Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (v)  "OPTIONEE" means a person who holds an outstanding Option.

     (w)  "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliate corporation" (within the meaning of the
Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (ii) is otherwise considered an "outside director" for
purposes of 162(m) of the Code.

     (x)  "PLAN" means this Javelin Systems, Inc. 1997 Equity Incentive Plan.

     (y)  "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (z)  "STOCK APPRECIATION RIGHT" means any of the various types of rights
which may be granted under Section 7 of the Plan.

     (aa) "STOCK AWARD" means any right granted under the Plan, including any
Option and any Stock Appreciation Right.

     (bb) "STOCK AWARD AGREEMENT" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant.  Each Stock Award Agreement shall be subject to
the terms and conditions of the Plan.

     (cc) "TANDEM STOCK APPRECIATION RIGHT" or "TANDEM RIGHT" means a right
granted pursuant to subsection 7(b)(i) of the Plan.

                                     3.
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3.   ADMINISTRATION.

     (a)  The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

     (b)  The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

          (i)     To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option or a Stock Appreciation Right, or a combination of the
foregoing; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; whether a person shall be permitted to
receive stock upon exercise of an Independent Stock Appreciation Right; and the
number of shares with respect to which a Stock Award shall be granted to each
such person.

          (ii)    To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration.  The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

          (iii)  To amend the Plan or a Stock Award as provided in Section 12.

     (c)  The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be Non-Employee Directors and/or Outside Directors.  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in this Plan to the Board shall thereafter be to
the Committee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.  Notwithstanding the foregoing, but only to the
extent permitted by applicable law, the Board may delegate to any executive
officer or executive officers of the Company authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act and
the term "Committee" shall apply to any such executive officer or executive
officers to whom such authority has been delegated.  Any such delegation,
however, shall include aggregate and individual limits on the size of Stock
Awards to be made by such a committee.

     (d)  Any requirement that an administrator of the Plan be a Non-Employee
Director shall not apply if the Board or the Committee expressly declares that
such requirement shall not apply. Any Non-Employee Director shall otherwise
comply with the requirements of Rule 16b-3.

4.   SHARES SUBJECT TO THE PLAN.

     (a)  Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate 

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one million one hundred thousand (1,100,000) shares of the Company's Common 
Stock.  If any Stock Award shall for any reason expire or otherwise 
terminate, in whole or in part, without having been exercised in full, the 
Common Stock not acquired under such Stock Award shall revert to and again 
become available for issuance under the Plan.  Shares of Common Stock subject 
to Stock Appreciation Rights exercised in accordance with Section 7 of the 
Plan shall not be available for subsequent issuance under the Plan.

     (b)  The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

5.   ELIGIBILITY.

     (a)  All Employees, Directors and Consultants of the Company (or any
business entity in which the Company owns directly or indirectly fifty percent
(50%) or more of the total voting power) capable of contributing significantly
to the successful performance of the Company, other than an employee who has
irrevocably elected not to be eligible, are eligible to be Participants in the
Plan.

     (b)  No person shall be eligible for the grant of an Option if, at the time
of grant, such person owns (or is deemed to own pursuant to Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates
unless the exercise price of such Option is at least one hundred ten percent
(110%) of the Fair Market Value of such stock at the date of grant and if the
Option is an Incentive Stock Option the Option is not exercisable after the
expiration of five (5) years from the date of grant.

     (c)  Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options and Stock
Appreciation Rights under the Plan covering more than seventy-five thousand
(75,000) shares of the Company's Common Stock in any calendar year.  

6.   OPTION PROVISIONS.

     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

     (a)  TERM.  No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.

     (b)  PRICE.  The Board will establish the exercise price of a Stock Award
at the time the Stock Award is granted.  Subject to Section 5(b) the exercise
price will not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock on the date of the Stock Award, provided that in the case of
a Nonstatutory Stock Option, the exercise price may be less than one hundred
percent (100%) of Fair Market Value on the date of such Award; provided,
however, that in no event will the exercise price be less than eighty-five
percent (85%) of Fair Market Value on the date of grant.  For so long as the
Company's Common Stock is traded on 

                                     5.
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any stock exchange or interdealer quotation system, the Fair Market Value of 
the Common Stock shall be the closing price of the Common Stock on the date 
of grant.

     (c)  CONSIDERATION.  The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board, as determined either at the time of the grant of
the Option or at any time thereafter, (A) by delivery to the Company of other
Common Stock of the Company, (B) according to a deferred payment arrangement,
except that payment of the Common Stock's "par value" (as defined in the
Delaware General Corporation Law) shall not be made by deferred payment, or
other arrangement (which may include, without limiting the generality of the
foregoing, the use of other Common Stock of the Company) with the person to whom
the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (C) in any other form of legal consideration that may be
acceptable to the Board.

     In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

     (d)  TRANSFERABILITY.  An Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such Optionee or
such Optionee's guardian or legal representative; provided, however, that the
Board may, in its discretion, waive such restriction in any case when such
restriction is no longer required by applicable law; provided, further that each
Nonstatutory Stock Option may be transferred to the spouse, children, lineal
ancestors and lineal descendants of the Optionee (or to a trust created solely
for the benefit of the Optionee or the foregoing persons) or to an organization
exempt from taxation pursuant to Section 501(c)(3) of the Code or to which tax
deductible charitable contributions may be made under Section 170 of the Code
(excluding such organizations classified as private foundations under applicable
regulations and rulings).

     (e)  VESTING.  The total number of shares of Common Stock subject to an
Option may, but need not, be allotted in periodic installments (which may, but
need not, be equal).  The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the shares allotted to that period, and
may be exercised with respect to some or all of the shares allotted to such
period and/or any prior period as to which the Option became vested but was not
fully exercised.  The vesting provisions of individual Options may vary, but in
the case of an Option granted to a non-officer employee, will provide for
vesting of at least twenty percent (20%) per year of the total number of shares
subject to the Option.  The provisions of this subsection 6(e) are subject to
any Option provisions governing the minimum number of shares as to which an
Option may be exercised.

     (f)  TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR CONSULTANT.
In the event an Optionee's Continuous Status as an Employee, Director or
Consultant terminates (other than upon the Optionee's death or disability), the
Optionee may exercise his or her Option 

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(to the extent that the Optionee was entitled to exercise it as of the date 
of termination) but only within such period of time ending on the earlier of 
(i) the date three (3) months after the termination of the Optionee's 
Continuous Status as an Employee, Director or Consultant (or such longer or 
shorter period, which in no event shall be less than thirty (30) days, 
specified in the Option Agreement), or (ii) the expiration of the term of the 
Option as set forth in the Option Agreement.  If, after termination, the 
Optionee does not exercise his or her Option within the time specified in the 
Option Agreement, the Option shall terminate, and the shares covered by such 
Option shall revert to and again become available for issuance under the Plan.

     An Optionee's Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee's Continuous Status as an
Employee, Director, or Consultant (other than upon the Optionee's death or
disability) would result in liability under Section 16(b) of the Exchange Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day
after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act.  Finally, an Optionee's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant (other than
upon the Optionee's death or disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Act, then the Option shall terminate on the earlier of (i) the expiration of
the term of the Option set forth in the Option Agreement, or (ii) the expiration
of a period of three (3) months after the termination of the Optionee's
Continuous Status as an Employee, Director or Consultant during which three (3)
month period the exercise of the Option would not be in violation of such
registration requirements.

     (g)  DISABILITY OF OPTIONEE.  In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period, which in no
event shall be less than six (6) months, specified in the Option Agreement), or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement.  If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan.  If, after termination, the Optionee does not exercise his or
her Option within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

     (h)  DEATH OF OPTIONEE.  In the event of the death of an Optionee during,
or within a period specified in the Option Agreement after the termination of,
the Optionee's Continuous Status as an Employee, Director or Consultant, the
Option may be exercised (to the extent the Optionee was entitled to exercise the
Option as of the date of death) by the Optionee's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionee's death pursuant to
subsection 6(d), but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period, which in no event shall be less than six (6) months, specified in the
Option Agreement), or (ii) the expiration of the term of such Option as 

                                     7.
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set forth in the Option Agreement.  If, at the time of death, the Optionee 
was not entitled to exercise his or her entire Option, the shares covered by 
the unexercisable portion of the Option shall revert to and again become 
available for issuance under the Plan.  If, after death, the Option is not 
exercised within the time specified herein, the Option shall terminate, and 
the shares covered by such Option shall revert to and again become available 
for issuance under the Plan.

7.   STOCK APPRECIATION RIGHTS.

     (a)  The Board (or Committee) shall have full power and authority,
exercisable in its discretion, to grant Stock Appreciation Rights under the Plan
to Employees or Directors of or Consultants to, the Company or its Affiliates. 
To exercise any outstanding Stock Appreciation Right, the holder must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Award Agreement evidencing such right.  If a Stock Appreciation Right
is granted to an individual who is at the time subject to Section 16(b) of the
Exchange Act (a "Section 16(b) Insider"), the Stock Award Agreement of grant
shall incorporate all the terms and conditions at the time necessary to assure
that the subsequent exercise of such right shall qualify for the safe-harbor
exemption from short-swing profit liability provided by Rule 16b-3 promulgated
under the Exchange Act (or any successor rule or regulation).  No limitation
shall exist on the aggregate amount of cash payments the Company may make under
the Plan in connection with the exercise of a Stock Appreciation Right.

     (b)  Three types of Stock Appreciation Rights shall be authorized for
issuance under the Plan:

          (i)    TANDEM STOCK APPRECIATION RIGHTS.  Tandem Stock Appreciation
Rights will be granted appurtenant to an Option, and shall, except as
specifically set forth in this Section 7, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains. 
Tandem Stock Appreciation Rights will require the holder to elect between the
exercise of the underlying Option for shares of stock and the surrender, in
whole or in part, of such Option for an appreciation distribution.  The
appreciation distribution payable on the exercised Tandem Right shall be in cash
(or, if so provided, in an equivalent number of shares of Common Stock based on
Fair Market Value on the date of the Option surrender) in an amount up to the
excess of (A) the Fair Market Value (on the date of the Option surrender) of the
number of shares of Common Stock covered by that portion of the surrendered
Option in which the Optionee is vested over (B) the aggregate exercise price
payable for such vested shares.

          (ii)   CONCURRENT STOCK APPRECIATION RIGHTS.  Concurrent Rights will
be granted appurtenant to an Option and may apply to all or any portion of the
shares of Common Stock subject to the underlying Option and shall, except as
specifically set forth in this Section 7, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains.  A
Concurrent Right shall be exercised automatically at the same time the
underlying Option is exercised with respect to the particular shares of Common
Stock to which the Concurrent Right pertains.  The appreciation distribution
payable on an exercised Concurrent Right shall be in cash (or, if so provided,
in an equivalent number of shares of Common Stock based on Fair Market Value on
the date of the exercise of the Concurrent Right) in an amount equal to such
portion as shall be determined by the Board at the time of the grant of the
excess of (A) the aggregate Fair Market Value (on the date of the exercise of
the Concurrent Right) of the 

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vested shares of Common Stock purchased under the underlying Option which 
have Concurrent Rights appurtenant to them over (B) the aggregate exercise 
price paid for such shares.

          (iii)  INDEPENDENT STOCK APPRECIATION RIGHTS.  Independent Rights will
be granted independently of any Option and shall, except as specifically set
forth in this Section 7, be subject to the same terms and conditions applicable
to Nonstatutory Stock Options as set forth in Section 6.  They shall be
denominated in share equivalents.  The appreciation distribution payable on the
exercised Independent Right shall be not greater than an amount equal to the
excess of (A) the aggregate Fair Market Value (on the date of the exercise of
the Independent Right) of a number of shares of Common Stock equal to the number
of share equivalents in which the holder is vested under such Independent Right,
and with respect to which the holder is exercising the Independent Right on such
date, over (B) the aggregate Fair Market Value (as determined on the date of the
grant of the Independent Right, or if so provided in the Independent Stock
Appreciation Right on the date of hire as an Employee if such date is within
ninety (90) days of the date of grant and such value is not less than
eighty-five percent (85%) of the aggregate Fair Market Value on the date of
grant) of such number of shares of Common Stock.  The appreciation distribution
payable on the exercised Independent Right shall be in cash or, if so provided,
in an equivalent number of shares of Common Stock based on Fair Market Value on
the date of the exercise of the Independent Right.

8.   CANCELLATION AND RE-GRANT OF OPTIONS.  The Board shall have the authority
to effect, at any time and from time to time, (i) the repricing of any
outstanding Options and/or any Stock Appreciation Rights under the Plan and/or
(ii) with the consent of the affected holders of Options and/or Stock
Appreciation Rights, the cancellation of any outstanding Options and/or any
Stock Appreciation Rights under the Plan and the grant in substitution therefor
of new Options and/or Stock Appreciation Rights under the Plan covering the same
or different numbers of shares of stock, but having an exercise price per share
not less than eighty-five percent (85%) of the Fair Market Value (one hundred
percent (100%) of the Fair Market Value in the case of an Incentive Stock Option
or, in the case of a ten percent (10%) shareholder (as described in subsection
5(b)), not less than one hundred ten percent (110%) of the Fair Market Value)
per share of Common Stock on the new grant date.  Notwithstanding the foregoing,
the Board may grant an Option and/or Stock Appreciation Right with an exercise
price lower than that set forth above if such Option and/or Stock Appreciation
Right is granted as part of a transaction to which section 424(a) of the Code
applies.

9.   COVENANTS OF THE COMPANY.

     (a)  During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of stock required to satisfy such Stock
Awards.

     (b)  The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of Common Stock upon exercise of the Stock Award;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award or any stock
issued or issuable pursuant to any such Stock Award.  If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common 

                                     9.
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Stock under the Plan, the Company shall be relieved from any liability for 
failure to issue and sell Common Stock upon exercise of such Stock Awards 
unless and until such authority is obtained.

10.  MISCELLANEOUS.

     (a)  Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

     (b)  Neither an Employee, Director or Consultant nor any person to whom a
Stock Award is transferred under subsection 6(d) shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Stock Award unless and until such person has satisfied all
requirements for exercise of the Stock Award pursuant to its terms.

     (c)  Throughout the term of any Stock Award, the Company shall deliver to
the holder of such Stock Award, not later than one hundred twenty (120) days
after the close of each of the Company's fiscal years during the term of such
Stock Award, a balance sheet and an income statement.  This section shall not
apply when issuance is limited to key employees whose duties in connection with
the Company assure them access to equivalent information.

     (d)  Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee, Director, Consultant or other
holder of Stock Awards any right to continue in the employ of the Company or any
Affiliate (or to continue acting as a Director or Consultant) or shall affect
the right of the Company or any Affiliate to terminate the employment of any
Employee with or without cause, to remove any Director as provided in the
Company's Bylaws and the provisions of the General Corporation Law of the State
of Delaware or to terminate the relationship of any Consultant in accordance
with the terms of that Consultant's agreement with the Company or Affiliate to
which such Consultant is providing services.

     (e)  To the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory Stock
Options.

     (f)  The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred pursuant to subsection 6(d),
as a condition of exercising or acquiring Common Stock under any Stock Award,
(1) to give written assurances satisfactory to the Company, if any, that are
necessary to ensure compliance with federal securities laws.  These
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise or acquisition
of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (ii) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.

                                     10.
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     (g)  To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means or by a combination of
such means:  (1) tendering a cash payment; (2) authorizing the Company to
withhold shares from the shares of the Common Stock otherwise issuable to the
participant as a result of the exercise or acquisition of Stock under the Stock
Award; or (3) delivering to the Company owned and unencumbered shares of the
Common Stock of the Company.

11.  ADJUSTMENTS UPON CHANGES IN STOCK.

     (a)  If any change is made in the Stock subject to the Plan, or subject to
any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan pursuant to subsection 4(a), and the
maximum number of securities subject to award to any person during any calendar
year pursuant to Section 5(c) and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of shares and price per share
of stock subject to such outstanding Stock Awards.  Such adjustments shall be
made by the Board or the Committee, the determination of which shall be final,
binding and conclusive.  If considered appropriate, the Board or the Committee
may make a provision for a cash payment with respect to all or part of an
outstanding Stock Award instead of or in addition to any such adjustment.  

     (b)  In the event of:  (1) a merger or consolidation in which the Company
is not the surviving corporation; (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (3) a sale of all or substantially all of the assets of the
Company, then:  (i) any surviving or acquiring corporation shall assume any
Stock Awards outstanding under the Plan or shall substitute similar stock awards
(including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(b)) for those outstanding
under the Plan, or (ii) in the event any surviving or acquiring corporation
refuses to assume such Stock Awards or to substitute similar Stock Awards for
those outstanding under the Plan, then such Stock Awards shall be terminated if
not exercised prior to such event.  In the event of a dissolution or liquidation
of the Company, any Stock Awards outstanding under the Plan shall terminate if
not exercised prior to such event.

12.  AMENDMENT OF THE PLAN AND STOCK AWARDS.

     (a)  The Board at any time, and from time to time, may amend the Plan. 
However, except as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders of
the Company to the extent shareholder approval is necessary for the Plan to
satisfy the requirements of Section 422 of the Code, Rule 16b-3 under the
Exchange Act or any Nasdaq or securities exchange listing requirements.

                                     11.
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     (b)  The Board may, in its sole discretion, submit any other amendment to
the Plan for shareholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

     (c)  It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible Employees,
Directors or Consultants with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

     (d)  Rights and obligations under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless:  (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

     (e)  The Board at any time, and from time to time, may amend the terms of
some or all Stock Awards; provided, however, that if the Board determines that
the effect of an amendment, taken as a whole, would be to impair rights and
obligations under any Stock Award then such amendment shall not be effective as
to a particular Stock Award unless:  (i) the Company requests the consent of the
person to whom the Stock Award was granted and (ii) such person consents in
writing.

13.  TERMINATION OR SUSPENSION OF THE PLAN.

     (a)  The Board may suspend or terminate the Plan at any time.  Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier.  No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.

     (b)  Rights and obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the written consent of the person to whom the Stock Award was granted.

14.  EFFECTIVE DATE OF PLAN.

     The Plan shall become effective as determined by the Board, but no Stock
Awards granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board,
and, if required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.

                                     12.