Document:

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                                                                     EXHIBIT 4.2

                  WARRANT AGREEMENT dated as of _________, 2000 between Delcath
Systems, Inc., a Delaware corporation (the "Company"), and Whale Securities Co.,
L.P. (hereinafter referred to as the "Underwriter").

                              W I T N E S S E T H:
                              - - - - - - - - - -

                  WHEREAS, the Company proposes to issue to the Underwriter
warrants (the "Warrants") to purchase up to 200,000 (as such number may be
adjusted from time to time pursuant to Article 8 of this Agreement) shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of the
Company; and

                  WHEREAS, the Underwriter has agreed, pursuant to the
underwriting agreement (the "Underwriting Agreement") dated ____________, 2000
between the Underwriter and the Company, to act as the underwriter in connection
with the Company's proposed public offering (the "Public Offering") of 2,000,000
shares of Common Stock (the "Public Shares") at an initial public offering price
of $6.00 per Public Share; and

                  WHEREAS, the Warrants issued pursuant to this Agreement are
being issued by the Company to the Underwriter or to its designees who are
officers and partners of the Underwriter or to members of the selling group
participating in the distribution of the Public Shares to the public in the
Public Offering and/or their respective officers or partners (collectively, the
"Designees"), in consideration for, and as part of the Underwriter's
compensation in connection with, the Underwriter acting as the Underwriter
pursuant to the Underwriting Agreement;

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                  NOW, THEREFORE, in consideration of the premises, the payment
by the Underwriter to the Company of ONE HUNDRED DOLLARS ($100.00), the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                  1. Grant.
                     ------

                  The Underwriter and/or the Designees are hereby granted the
right to purchase, at any time from ____________, 2000 until 5:00 P.M., New York
time, on _______, 2005 (the "Warrant Exercise Term"), up to 200,000 fully-paid
and non-assessable Shares at an initial exercise price (subject to adjustment as
provided in Article 8 hereof) of $9.90 per Share.

                  2. Warrant Certificates.
                     ---------------------

                  The warrant certificates delivered and to be delivered
pursuant to this Agreement (the "Warrant Certificates") shall be in the form set
forth in Exhibit A attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.

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                  3. Exercise of Warrant.
                     ----------------------

                  3.1. Cash Exercise. The Warrants initially are exercisable at
a price of $9.90 per Share, payable in cash or by check to the order of the
Company, or any combination thereof, subject to adjustment as provided in
Article 8 hereof. Upon surrender of the Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the
Exercise Price (as hereinafter defined) for the Shares purchased, at the
Company's principal offices in New York (currently located at 1100 Summer
Street, Stamford, Connecticut 06905) the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Shares so purchased. The purchase rights represented by
each Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional Shares). In the case of the purchase
of less than all the Shares purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares purchasable thereunder.

                  3.2. Cashless Exercise. At any time during the Warrant
Exercise Term, the Holder may, at the Holder's option, exchange, in whole or in

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part, the Warrants represented by such Holder's Warrant Certificate (a "Warrant
Exchange"), into the number of Shares determined in accordance with this Section
3.2, by surrendering such Warrant Certificate at the principal office of the
Company or at the office of its transfer agent, accompanied by a notice stating
such Holder's intent to effect such exchange, the number of Warrants to be so
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
Shares issuable upon such Warrant Exchange and, if applicable, a new Warrant
Certificate of like tenor representing the Warrants which were subject to the
surrendered Warrant Certificate and not included in the Warrant Exchange, shall
be issued as of the Exchange Date and delivered to the Holder within three (3)
days following the Exchange Date. In connection with any Warrant Exchange, the
Holder shall be entitled to subscribe for and acquire (i) the number of Shares
(rounded to the next highest integer) which would, but for the Warrant Exchange,
then be issuable pursuant to the provision of Section 3.1 above upon the
exercise of the Warrants specified by the Holder in its Notice of Exchange (the

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"Total Number") less (ii) the number of Shares equal to the quotient obtained by
dividing (a) the product of the Total Number and the existing Exercise Price (as
hereinafter defined) by (b) the Market Price (as hereinafter defined) of a
Public Share on the day preceding the Warrant Exchange. "Market Price" at any
date shall be deemed to be the last reported sale price, or, in case no such
reported sales takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as officially
reported by the principal securities exchange on which the Common Stock is
listed or admitted to trading or as reported in the NASDAQ National Market
System, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on the NASDAQ National Market System, the
closing bid price as furnished by (i) the National Association of Securities
Dealers, Inc. through Nasdaq or (ii) a similar organization if Nasdaq is no
longer reporting such information.

                  4. Issuance of Certificates.
                     -------------------------

                  Upon the exercise of the Warrants, the issuance of
certificates for the Shares purchased shall be made forthwith (and in any event
within three (3) business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the

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issuance thereof, and such certificates shall (subject to the provisions of
Article 5 hereof) be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificates in a name other than that
of the Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

                  The Warrant Certificates and the certificates representing the
Shares shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman or Vice Chairman of the Board of
Directors, Chief Executive Officer or President or Vice President of the Company
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company. Warrant Certificates shall be dated the date of
execution by the Company upon initial issuance, division, exchange, substitution
or transfer.

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                  Upon exercise, in part or in whole, of the Warrants,
certificates representing the Shares shall bear a legend substantially similar
to the following:

         "The securities represented by this certificate have not been
         registered for purposes of public distribution under the Securities Act
         of 1933, as amended (the "Act"), and may not be offered or sold except
         (i) pursuant to an effective registration statement under the Act, (ii)
         to the extent applicable, pursuant to Rule 144 under the Act (or any
         similar rule under such Act relating to the disposition of securities),
         or (iii) upon the delivery by the holder to the Company of an opinion
         of counsel, reasonably satisfactory to counsel to the Company, stating
         that an exemption from registration under such Act is available."

                  5. Restriction on Transfer of Warrants.
                     ------------------------------------

                  The Holder of a Warrant Certificate, by the Holder's
acceptance thereof, covenants and agrees that the Warrants are being acquired as
an investment and not with a view to the distribution thereof, and that the
Warrants may not be sold, transferred, assigned, hypothecated or otherwise
disposed of, in whole or in part, for a period of one (1) year from the date
hereof, except to the Designees.

                  6. Price.
                     ------

                  6.1. Initial and Adjusted Exercise Price. The initial exercise
price of each Warrant shall be $9.90 per Share. The adjusted exercise price per
Share shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price per Share in accordance with the
provisions of Article 8 hereof.

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                  6.2. Exercise Price. The term "Exercise Price" herein shall
mean the initial exercise price or the adjusted exercise price, depending upon
the context.

                  7. Registration Rights.
                     --------------------

                  7.1. Registration Under the Securities Act of 1933. None of
the Warrants or Shares have been registered for purposes of public distribution
under the Securities Act of 1933, as amended (the "Act").

                  7.2. Registrable Securities. As used herein the term
"Registrable Security" means each of the Warrants, the Shares and any shares of
Common Stock issued upon any stock split or stock dividend in respect of such
Shares; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the
date of determination, (i) it has been effectively registered under the Act and
disposed of pursuant thereto, (ii) registration under the Act is no longer
required for the subsequent public distribution of such security or (iii) it has
ceased to be outstanding. The term "Registrable Securities" means any and/or all
of the securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,

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recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Article 7.

                  7.3. Piggyback Registration. If, at any time following the
effective date of the Public Offering, the Company proposes to prepare and file
one or more post-effective amendments to the registration statement filed in
connection with the Public Offering or any new registration statement or
post-effective amendments thereto covering equity or debt securities of the
Company, or any such securities of the Company held by its stockholders (in any
such case, other than in connection with a merger, acquisition or pursuant to
Form S-8 or successor form), (for purposes of this Article 7, collectively, the
"Registration Statement"), it will give written notice of its intention to do so
by registered mail ("Notice"), at least thirty (30) business days prior to the
filing of each such Registration Statement, to all holders of the Registrable
Securities. Upon the written request of such a holder (a "Requesting Holder"),
made within twenty (20) business days after receipt of the Notice, that the

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Company include any of the Requesting Holder's Registrable Securities in the
proposed Registration Statement, the Company shall, as to each such Requesting
Holder, use its best efforts to effect the registration under the Act of the
Registrable Securities which it has been so requested to register ("Piggyback
Registration"), at the Company's sole cost and expense and at no cost or expense
to the Requesting Holders (except as provided in Section 7.5(b) hereof).

                  7.4. Demand Registration.
                       -------------------

                  (a) At any time during the Warrant Exercise Term, any
"Majority Holder" (as such term is defined in Section 7.4(c) below) of the
Registrable Securities shall have the right (which right is in addition to the
piggyback registration rights provided for under Section 7.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission"), on one occasion, at the sole expense of the
Company (except as provided in Section 7.5(b) hereof), a Registration Statement
and such other documents, including a prospectus, as may be necessary (in the
opinion of both counsel for the Company and counsel for such Majority Holder),
in order to comply with the provisions of the Act, so as to permit a public
offering and sale of the Registrable Securities by the holders thereof. The

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Company shall use its best efforts to cause the Registration Statement to become
effective under the Act, so as to permit a public offering and sale of the
Registrable Securities by the holders thereof. Once effective, the Company will
use its best efforts to maintain the effectiveness of the Registration Statement
until the earlier of (i) the date that all of the Registrable Securities have
been sold or (ii) the date that the holders of the Registrable Securities
receive an opinion of counsel to the Company that all of the Registrable
Securities may be freely traded (without limitation or restriction as to
quantity or timing and without registration under the Act) under Rule 144(k)
promulgated under the Act or otherwise.

                  (b) The Company covenants and agrees to give written notice of
any Demand Registration Request to all holders of the Registrable Securities
within ten (10) business days from the date of the Company's receipt of any such
Demand Registration Request. After receiving notice from the Company as provided
in this Section 7.4(b), holders of Registrable Securities may request the
Company to include their Registrable Securities in the Registration Statement to
be filed pursuant to Section 7.4(a) hereof by notifying the Company of their
decision to have such securities included within ten (10) days of their receipt
of the Company's notice.

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                  (c) The term "Majority Holder" as used in Section 7.4 hereof
shall mean any holder or any combination of holders of Registrable Securities,
if included in such holders' Registrable Securities are that aggregate number of
shares of Common Stock (including Shares already issued and Shares issuable
pursuant to the exercise of outstanding Warrants) as would constitute a majority
of the aggregate number of Shares (including Shares already issued and Shares
issuable pursuant to the exercise of outstanding Warrants) included in all the
Registrable Securities.

                  7.5. Covenants of the Company With Respect to Registration.
                       ------------------------------------------------------
The Company covenants and agrees as follows:

                  (a) In connection with any registration under Section 7.4
hereof, the Company shall file the Registration Statement as expeditiously as
possible, but in any event no later than twenty (20) days following receipt of
any demand therefor, shall use its best efforts to have any such Registration
Statement declared effective at the earliest possible time, and shall furnish
each holder of Registrable Securities such number of prospectuses as shall
reasonably be requested.

                  (b) The Company shall pay all costs, fees and expenses (other
than underwriting fees, discounts and nonaccountable expense allowance
applicable to the Registrable Securities and the fees and expenses of counsel
retained by the holders of Registrable Securities) in connection with all

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Registration Statements filed pursuant to Sections 7.3 and 7.4(a) hereof
including, without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses.

                  (c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in the
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the holders of such
securities.

                  (d) The Company shall indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such holder or underwriter or person deemed to be an underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising

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from such Registration Statement to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify the
Underwriter as set forth in Section 7 of the Underwriting Agreement and to
provide for just and equitable contribution as set forth in Section 8 of the
Underwriting Agreement.

                  (e) Any holder of Registrable Securities to be sold pursuant
to a Registration Statement, and such holder's successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such holder, or such holder's
successors or assigns, for specific inclusion in such Registration Statement to
the same extent and with the same effect as the provisions pursuant to which the
Underwriter has agreed to indemnify the Company as set forth in Section 7 of the
Underwriting Agreement and to provide for just and equitable contribution as set
forth in Section 8 of the Underwriting Agreement.

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                  (f) Nothing contained in this Agreement shall be construed as
requiring any Holder to exercise the Warrants held by such Holder prior to the
initial filing of any Registration Statement or the effectiveness thereof.

                  (g) If the Company shall fail to comply with the provisions of
this Article 7, the Company shall, in addition to any other equitable or other
relief available to the holders of Registrable Securities, be liable for any or
all incidental, special and consequential damages sustained by the holders of
Registrable Securities, requesting registration of their Registrable Securities.

                  (h) The Company shall promptly deliver copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with
respect to the Registration Statement to each holder of Registrable Securities
included for such registration in such Registration Statement pursuant to
Section 7.3 hereof or Section 7.4 hereof requesting such correspondence and
memoranda and to the managing underwriter, if any, of the offering in connection
with which such holder's Registrable Securities are being registered and shall

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permit each holder of Registrable Securities and such underwriter to do such
reasonable investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the Registration Statement as it deems
reasonably necessary to comply with applicable securities laws or rules of the
National Association of Securities Dealers, Inc. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such holder
of Registrable Securities or underwriter shall reasonably request.

                  8. Adjustments of Exercise Price and Number of Shares.
                     ---------------------------------------------------

                  8.1. Computation of Adjusted Price. In case the Company shall
at any time after the date hereof pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then upon such dividend or
distribution the Exercise Price in effect immediately prior to such dividend or
distribution shall forthwith be reduced to a price determined by dividing:

                  (a) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution multiplied
by the Exercise Price in effect immediately prior to such dividend or
distribution, by

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                  (b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.

                  For the purposes of any computation to be made in accordance
with the provisions of this Section 8.1, the Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution.

                  8.2. Subdivision and Combination. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.

                  8.3. Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 8, the number of
Shares issuable upon the exercise of each Warrant shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.

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                  8.4. Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holders shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owners of the shares of
Common Stock underlying the Warrants immediately prior to any such events at a
price equal to the product of (x) the number of shares of Common Stock issuable
upon exercise of the Holder's Warrants and (y) the Exercise Price in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holders had exercised the
Warrants.

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                  8.5. Determination of Outstanding Shares of Common Stock. The
number of shares of Common Stock at any one time outstanding shall include the
aggregate number of shares of Common Stock issued and the aggregate number of
shares of Common Stock issuable upon the exercise of options, rights, warrants
and upon the conversion or exchange of convertible or exchangeable securities.

                  8.6. Dividends and Other Distributions with Respect to
Outstanding Securities. In the event that the Company shall at any time prior to
the exercise of all Warrants make any distribution of its assets to holders of
its Common Stock as a liquidating or a partial liquidating dividend, then the
holder of Warrants who exercises its Warrants after the record date for the
determination of those holders of Common Stock entitled to such distribution of
assets as a liquidating or partial liquidating dividend shall be entitled to
receive for the Warrant Price per Warrant, in addition to each share of Common
Stock, the amount of such distribution (or, at the option of the Company, a sum
equal to the value of any such assets at the time of such distribution as

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determined by the Board of Directors of the Company in good faith) which would
have been payable to such holder had he been the holder of record of the Common
Stock receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution. At the time of any such
dividend or distribution, the Company shall make appropriate reserves to ensure
the timely performance of the provisions of this Subsection 8.6.

                  8.7. Subscription Rights for Shares of Common Stock or Other
Securities. In the case that the Company or an affiliate of the Company shall at
any time after the date hereof and prior to the exercise of all the Warrants
issue any rights, warrants or options to subscribe for shares of Common Stock or
any other securities of the Company or of such affiliate to all the stockholders
of the Company, the Holders of unexercised Warrants on the record date set by
the Company or such affiliate in connection with such issuance of rights,
warrants or options shall be entitled, in addition to the shares of Common Stock
or other securities receivable upon the exercise of the Warrants, to receive
such rights, warrants or options that such Holders would have been entitled to
receive had they been, on such record date, the holders of record of the number
of whole shares of Common Stock then issuable upon exercise of their outstanding
Warrants (assuming for purposes of this Section 8.7), that the exercise of the
Warrants is permissible immediately upon issuance).

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                  9. Exchange and Replacement of Warrant Certificates.
                     -------------------------------------------------

                  Each Warrant Certificate is exchangeable without expense, upon
the surrender thereof by the registered Holder at the principal executive office
of the Company, for a new Warrant Certificate of like tenor and date
representing in the aggregate the right to purchase the same number of
securities in such denominations as shall be designated by the Holder thereof at
the time of such surrender.

                  Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Warrant Certificate, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.

                  10. Elimination of Fractional Interests.

                  The Company shall not be required to issue certificates
representing fractions of Shares, nor shall it be required to issue scrip or pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of Shares.

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                  11. Reservation and Listing of Securities.
                      --------------------------------------

                  The Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance
upon the exercise of the Warrants, such number of shares of Common Stock as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all Shares issuable upon such exercise shall be duly and validly issued, fully
paid, non-assessable and not subject to the preemptive rights of any
stockholder. As long as the Warrants shall be outstanding, the Company shall use
its best efforts to cause all shares of Common Stock issuable upon the exercise
of the Warrants to be listed on or quoted by Nasdaq or listed on such national
securities exchange, in the event the Common Stock is listed on a national
securities exchange.

                  12. Notices to Warrant Holders.
                      ---------------------------

                  Nothing contained in this Agreement shall be construed as
conferring upon the Holder or Holders the right to vote or to consent or to
receive notice as a stockholder in respect of any meetings of stockholders for
the election of directors or any other matter, or as having any rights

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whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:

                           (a) the Company shall take a record of the holders of
                  its shares of Common Stock for the purpose of entitling them
                  to receive a dividend or distribution payable otherwise than
                  in cash, or a cash dividend or distribution payable otherwise
                  than out of current or retained earnings, as indicated by the
                  accounting treatment of such dividend or distribution on the
                  books of the Company; or

                           (b) the Company shall offer to all the holders of its
                  Common Stock any additional shares of capital stock of the
                  Company or securities convertible into or exchangeable for
                  shares of capital stock of the Company, or any option, right
                  or warrant to subscribe therefor; or

                           (c) a dissolution, liquidation or winding up of the
                  Company (other than in connection with a consolidation or
                  merger) or a sale of all or substantially all of its property,
                  assets and business as an entirety shall be proposed; or

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                           (d) reclassification or change of the outstanding
                  shares of Common Stock (other than a change in par value to no
                  par value, or from no par value to par value, or as a result
                  of a subdivision or combination), consolidation of the Company
                  with, or merger of the Company into, another corporation
                  (other than a consolidation or merger in which the Company is
                  the surviving corporation and which does not result in any
                  reclassification or change of the outstanding shares of Common
                  Stock, except a change as a result of a subdivision or
                  combination of such shares or a change in par value, as
                  aforesaid), or a sale or conveyance to another corporation of
                  the property of the Company as an entirety is proposed; or

                           (e) The Company or an affiliate of the Company shall
                  propose to issue any rights to subscribe for shares of Common
                  Stock or any other securities of the Company or of such
                  affiliate to all the shareholders of the Company;

then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,

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convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any convertible or exchangeable securities or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.

                           13. Notices.
                               --------

                  All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

                           (a) If to a registered Holder of the Warrants, to the
                  address of such Holder as shown on the books of the Company;
                  or

                           (b) If to the Company, to the address set forth in
                  Section 3 of this Agreement or to such other address as the
                  Company may designate by notice to the Holders.

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                  14. Supplements and Amendments.
                      ---------------------------

                  The Company and the Underwriter may from time to time
supplement or amend this Agreement without the approval of any Holders of
Warrant Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem not to
adversely affect the interests of the Holders of Warrant Certificates.

                  15. Successors.
                      -----------

                  All the covenants and provisions of this Agreement by or for
the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.

                  16. Termination.
                      ------------

                  This Agreement shall terminate at the close of business on
__________, 2008. Notwithstanding the foregoing, this Agreement will terminate
on any earlier date when all Warrants have been exercised and all the Shares
issuable upon exercise of the Warrants have been resold to the public; provided,

                                       26
<PAGE>

however, that the provisions of Section 7 shall survive any termination pursuant
to this Section 16 until the close of business on _________, 2011.

                  17. Governing Law.
                      --------------

                  This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the laws of said
State.

                  18. Benefits of This Agreement.
                      ---------------------------

                  Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company and the Underwriter and any other
registered holder or holders of the Warrant Certificates, Warrants or the Shares
any legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Underwriter and any other holder or holders of the Warrant Certificates,
Warrants or the Shares.

                                       27

<PAGE>

                  19. Counterparts.
                      -------------

                  This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.

                                            DELCATH SYSTEMS, INC.

                                            By:
                                               ---------------------------------
                                               Name: M.S. Koly
                                               Title: Chief Executive Officer

                                            WHALE SECURITIES CO., L.P.

                                            By: Whale Securities Corp.,
                                                General Partner

                                            By:
                                               ---------------------------------
                                               Name: William G. Walters
                                               Title: Chairman

                                       28

<PAGE>

                                                                       EXHIBIT A

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED FOR PURPOSES OF PUBLIC
DISTRIBUTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144
UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION
OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, STATING
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                    5:00 P.M., NEW YORK TIME, _________, 2005

No. W-                                                          _______ Warrants

                               WARRANT CERTIFICATE

                  This Warrant Certificate certifies that _______________
___________________ or registered assigns, is the registered holder of
____________ (________) Warrants to purchase, at any time from ____________,
2000 until 5:00 P.M. New York City time on ___________, 2005 ("Expiration
Date"), up to _________ fully-paid and non-assessable shares ("Shares") of
common stock, par value $.01 per share (the "Common Stock"), of Delcath Systems,
Inc., a Delaware corporation (the "Company"), at the initial exercise price,
subject to adjustment in certain events (the "Exercise Price"), of $6.60 per
Share upon surrender of this Warrant Certificate and payment of the Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the warrant agreement dated as of ____________, 2000 between
the Company and Whale Securities Co., L.P. (the "Warrant Agreement"). Payment of
the Exercise Price may be made in cash, or by certified or official bank check
in New York Clearing House funds payable to the order of the Company, or any
combination thereof.

                  No Warrant may be exercised after 5:00 P.M., New York City
time, on the Expiration Date, at which time all Warrants evidenced hereby,
unless exercised prior thereto, shall thereafter be void.

<PAGE>

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.

                  The Warrant Agreement provides that upon the occurrence of
certain events, the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.

                  Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax, or
other governmental charge imposed in connection therewith.

                  Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.

                  The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.

                                       2
<PAGE>

                  All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.

                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.

Dated:  ___________, 2000

                                           DELCATH SYSTEMS, INC.

                                           By:
                                              ----------------------------------
                                              Name:  M.S. Koly
                                              Title: Chief Executive Officer

                                       3

<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

                  The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase _________ shares of
Common Stock and herewith tenders in payment for such securities cash or a
certified or official bank check payable in New York Clearing House Funds to the
order of Delcath Systems, Inc. in the amount of $ _____, all in accordance with
the terms hereof. The undersigned requests that a certificate for such
securities be registered in the name of __________, whose address is
__________________, and that such Certificate be delivered to
__________________, whose address is _____________.

Dated:                                      Signature:
                                                      --------------------------
                                            (Signature must conform in all
                                            respects to name of holder as
                                            specified on the face of the
                                            Warrant Certificate.)

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

                        --------------------------------
                        (Insert Social Security or Other
                          Identifying Number of Holder)

<PAGE>

                              [FORM OF ASSIGNMENT]

 (To be executed by the registered holder if such holder desires to transfer the
                              Warrant Certificate.)

                  FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto__________________________________________________________________
                       (Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.

Dated:                                      Signature:
                                                      --------------------------
                                            (Signature must conform in all
                                            respects to name of holder as
                                            specified on the face of the
                                            Warrant Certificate.)

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

                        --------------------------------
                        (Insert Social Security or Other
                          Identifying Number of Holder)<PAGE>

                                 1992 INCENTIVE
                                STOCK OPTION PLAN
                                       OF
                              DELCATH SYSTEMS, INC.

1. Purpose of Plan

The purpose of this 1992 Incentive Stock Option Plan (the "Plan") is to further
the growth and development of Delcath Systems, Inc. (the "Company") and any
direct and indirect subsidiaries thereof (collectively, "Subsidiaries", and
each, singly, a "Subsidiary") by encouraging selected employees who contribute
and are expected to contribute materially to the Company's success to obtain a
proprietary interest in the Company through the ownership of stock, thereby
providing such persons with an added incentive to promote the best interests of
the Company and affording the Company a means of attracting to its service
persons of outstanding ability.

2. Incentive Stock Options; Stock Subject to the Plan.

An aggregate of 160,000 shares of the Company's Common Stock, $.01 par value
("Common Stock"), subject, however, to adjustment or change pursuant to
paragraph 12 hereof, shall be reserved for issuance upon the exercise of
incentive stock options within the meaning of Section 422 (b) of the Internal
Revenue Code of 1986, as amended (the "Code") which may be granted from time to
time in accordance with the Plan ("Options"). Such shares may be, in whole or in
part, as the Stock Option Committee (the "Committee") shall from time to time
determine, authorized but unissued shares or issued shares which have been
reacquired by the Company. If, for any reason, an Option shall lapse, expire or
terminate without having been exercised in full, the unpurchased shares covered
thereby shall again be available for purposes of the Plan.

3. Administration.

(a) The Board of Directors shall appoint the Committee from among its members.
Such Committee shall be composed of two or more Directors who shall be
"disinterested persons" as defined by Regulation 240.16b-3 under the Securities
Exchange Act of 1934, as amended. Such Committee shall have and may exercise any
and all of the powers relating to the administration of the Plan and the grant
of Options there under as are set forth in subparagraph 3(b) hereof. The Board
of Directors shall have the power at any time to fill vacancies in, to change
the membership of, or to discharge such Committee. The Committee shall select
one of its members as its chairman and shall hold its meetings at such times and
at such places as it shall deem advisable. A majority of such Committee shall
constitute a quorum, and such majority shall determine its action. Any action
may be taken without a meeting by written consent of all the members of the
Committee. The Committee shall keep minutes of its proceedings and shall report
the same to the Board of Directors at the meeting next succeeding.

(b) The Committee shall administer the Plan and, subject to the provisions of
the Plan, shall have sole authority in its discretion to determine the persons
to whom, and the time or times at which. Options shall be granted, and the
number of shares to be subject to each such Option. In making such
determinations, the Committee may take into account the nature of the services
rendered by such persons, their present and potential contributions to the
Company's success and such other factors as the Committee in its sole discretion
<PAGE>

may deem relevant. Subject to the express provisions of the Plan, the Committee
shall also have the authority to interpret the Plan, to prescribe, amend
and-rescind rules and regulations relating thereto, to determine the terms and
provisions of the respective Option Agreements, which shall be substantially in
the form attached hereto as Exhibit A, and to make all other determinations
necessary or advisable for the administration of the Plan, all of which
determinations shall be conclusive and not subject to review.

4. Eligibility for Receipt of Options.

Options hereunder may be granted only to employees (including officers) of the
Company and/or any of its Subsidiaries.

The aggregate Fair Market Value (as defined in paragraph 5 of the Plan),
determined as of the time the Option is granted, of the shares of the Company's
Common Stock purchasable there under exercisable for the first time by an
employee during any calendar year may not exceed $100,000.

Options may not be granted to any person who, at the time the Option is granted,
owns (or is considered as owning within the meaning of Section 425 (d) of the
Code) stock possessing more than 10% of the total combined voting powers of all
classes of stock of the Company or any Subsidiary (a "10% Owner"), unless at the
time the Option is granted to a 10% Owner, the option price is at least 110% of
the fair market value of the Common Stock subject thereto and such Option by its
terms is not exercisable subsequent to five years from the date of grant.

Nothing herein contained shall prohibit the Company from granting Options
hereunder to any holder of any other incentive or non-incentive stock options of
the Company, if any, provided the prospective recipient of Options hereunder is
otherwise eligible to receive such Options pursuant to the terms of this Plan,
and each type of option is clearly designated.

5. Option Price.

The purchase price of the shares of Common Stock under each Option shall be
determined by the Committee, which determination shall be conclusive and not
subject to review, but in no event shall the purchase price of the shares of
Common Stock under any Option be less than 100% of the fair market value of the
Common Stock on the date of grant (110% of fair market value in the case of
Options granted to a 10% Owner).

In determining the fair market value of the Common Stock as of a specified date
(the "Fair Market Value"), the Committee shall consider, if the Common Stock is:
(a) publicly traded and listed on the New York Stock Exchange or another
national securities exchange, the closing price of the Common Stock on the
business day immediately preceding the date as of which the Fair Market Value is
being determined, or on the next preceding date on which such Common Stock is
traded if no Common Stock was traded on such immediately preceding business day,
or, if the Common Stock is not so listed on a national securities exchange, but
publicly traded, the representative closing bid price in the over-the-counter
market as reported by NASDAQ or as quoted by the National Quotation Bureau or a
recognized dealer in the Common Stock, on the date immediately preceding the
date as of which the Fair Market Value is being determined, or on the next
preceding date on which such Common Stock is traded if no Common Stock was
traded on such immediately preceding business day; or (b) not publicly traded,
<PAGE>

the fair market value as determined by the Committee in good faith based on such
factors as it shall deem appropriate. The Committee may also consider such other
factors as it shall deem appropriate.

For purposes of the Plan, the date of grant of an Option shall be the date on
which the Committee shall by resolution duly authorize such Option.

6. Term of Options.

The term of each Option shall be such number of years as the Committee shall
determine, subject to earlier termination as herein provided, and subject to the
limitations set forth in paragraph 4 of this Plan with respect to grants to 10%
owners, but in no event shall any Option be for a term of more than ten years
from the date of grant. No Option may be exercised following termination
thereof.

7. Exercise of Options.

(a) (i) Vesting. No Option granted under the Plan shall be exercisable until
such date or dates (inclusive of the date of grant and thereafter) as shall be
determined by the Committee, but in no event until at least six months from the
date of grant, with each Option to be so exercisable to the extent determined by
the Committee.

(ii) Minimum Exercise. An Option may not be exercised for fewer than ten shares
at any one time (or the remaining shares then purchasable if less than ten) and
may not be exercised fop fractional shares of the Company's Common Stock.

(b) Except as provided in paragraphs 9, 10 and II hereof, no Option shall be
exercisable unless the holder thereof shall have been an employee of the Company
and/or a Subsidiary continuously from the date of grant to the date of exercise.

(c) (i) The exercise of an Option shall be contingent upon receipt by the
Company from the holder of such Option of:

(1) cash, or a check to the order of the Company, for the full purchase price of
the Option shares;

(2) a written representation that at the time of such exercise it is the
optionee's then present intention to acquire the Option shares for investment
and not with a view to the distribution or resale thereof (unless a Registration
Statement covering the shares purchasable upon exercise of the Options shall
have been declared effective by the Securities and Exchange Commission, the
Company being under no obligation to file such registration statement or process
it to effectiveness);

(3) a written acknowledgement by the Optionholder, in such form as may be
determined by the Committee, that an investment in the Common Stock of the
Company involves a high degree of risk, that the Optionholder has received a
copy of the Company's financial statements for the most recently ended fiscal
year for which such statement is available (which shall be provided annually by
the Company to each Optionholder), and that the Optionholder has had the
opportunity to ask questions of management concerning the Company prior to the
exercise of the Option (the Company to provide such information as the
Optionholder may reasonably request);
<PAGE>

(4) such Stockholders' Agreement as the Company may require at the time of
exercise of such Option (the "Stockholders' Agreement"), executed and delivered
by the holder, the form of which the Company reserves the right to change at any
time and from time to time, and which, among other things, may restrict the sale
of the Option shares and other shares of capital stock of the Company
subsequently acquired by the holder. Specifically, these restrictions may
include, without limitation, that Venkol Ventures, L.P. and Venkol Ventures,
Ltd. have a right of first refusal to purchase any or all shares of the
Company's capital stock owned by the holder following a bona fide offer
therefore by a third party. Additionally, in the event the two Venkol entities
shall agree to sell all of their holdings in the Company to a third party, such
Venkol entities may cause the holder to sell all shares of capital stock of the
Company then owned by such holder to the third party. Further, the Stockholders'
Agreement may provide that to the extent requested by the managing underwriter
in the event of and in respect of an underwritten offering of securities of the
Company, the holder will agree to refrain from selling or offering to sell any
securities of the Company for such reasonable period of time after the effective
date of the registration statement relating to the underwritten offering as the
holders of at least seventy-five percent (75%) of the outstanding shares of the
Company's Class A Preferred Stock will have agreed to refrain from selling or
offering to sell their Class A Preferred Stock and/or Common Stock in the
Company issuable upon conversion thereof (the "Underwriter's Lockup"); and

(5) in the event such holder is an employee of the Company or a Subsidiary, such
Escrow Agreement, Pledge Agreement or other agreement as the Company may require
(the "Deposit Agreement"), pursuant to which such holder shall deposit, upon
such exercise by the holder, with the Company or such third party as may be
designated by the Company therefore, the Option shares acquired pursuant to the
exercise of such Option, together with stock powers executed in blank by such
holder with respect to such Option shares as may be determined by the Company,
all so as to facilitate the enforcement of the Underwriter's Lockup described
above, the other provisions of the Stockholders' Agreement, and/or the
repurchase by the Company of the Option shares described in Paragraph 14 below,
and which Deposit Agreement shall .remain in effect until the termination, if at
all, of the Stockholders' Agreement (at which time. the Option Shares and
related stock powers would be returned). No shares shall be issued until full
payment therefore has been made. In the event the representation described in
Paragraph 7(c)(i)(2) above is required and made and/or the holder executes and
delivers the Stockholders' Agreement, the Committee may cause each certificate
evidencing the purchased Common Stock to be endorsed with one or more legends
setting forth the restrictions on transfer or otherwise of such Common Stock.

(d) The holder of an Option shall have none of the rights of a stockholder with
respect to the shares purchasable upon exercise of the Option until a
certificate for such shares shall have been issued to the holder upon due
exercise of the Option.

(e) The proceeds received by the Company upon exercise of an Option shall be
added to the Company's working capital and be available for general corporate
purposes.
<PAGE>

8. Non-Transferability of Options.

No Option granted pursuant to the Plan shall be transferable otherwise than by
will or the laws of descent and distribution, and an Option may be exercised
during the lifetime of the holder only by such holder.

9. Termination of Employment of Holder of Option.

In the event the employment with the Company or a Subsidiary of the holder of an
Option shall be terminated for any reason other than by reason of death,
disability within the meaning of Section 22(e) (3) of the Code, or retirement at
or after age 65, such holder's Option shall immediately terminate, lapse and
expire. Absence on leave approved by the employer corporation or entity shall
not be considered an interruption of employment for any purpose under the Plan.

Nothing in the Plan or in any Option Agreement granted hereunder shall' confer
upon any Optionholder any right to continue in the employ of the Company or any
Subsidiary or obligate the Company or any Subsidiary to continue the employment
of any Optionholder or interfere in any way with the right of the Company or any
such Subsidiary to terminate such Optionholder's employment at any time.

10. Retirement or Disability of Holder of Option.

If the employment with the Company or a Subsidiary of the holder of an Option
shall be terminated by reason of such holder's disability within the meaning of
Section 22(e) (3) of the Code, or retirement at or after age 65, such holder (or
such holder's legal representative, on such holder's behalf, if applicable) may,
within six months from the date of such termination, exercise such Option, but
only to the extent such Option was exercisable by such holder at the date of
such termination. Notwithstanding the foregoing, no Option may be exercised
subsequent to the date of its expiration.

11. Death of Holder of Option.

If the holder of any Option shall die while in the employ of the Company or a
Subsidiary (or within six months following termination of employment due to
disability within the meaning of Section 22(e) (3) of the Code, or retirement at
or after age 65), the Option theretofore granted to such person may be
exercised, but only to the extent such Option was exercisable by such holder at
the date of death (or the date of termination of employment due to disability or
retirement at or after age 65) by the legatee or legatees of such person under
such person's Last Will, or by such person's personal representative or
distributees, within six months from the date of death but in no event
subsequent to the expiration date of the Option.

12. Adjustments Upon Chancres in Capitalization.

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

13. Vesting of Rights Under Options.

Neither anything contained in the Plan nor in any resolution adopted or to be
adopted by the Committee or the stockholders of the Company shall constitute the
vesting of any rights under any Option. The vesting of such rights shall take
place only when a written Option Agreement, substantially in the form of the
Incentive Stock Option Agreement attached hereto as Exhibit A shall be duly
executed and delivered by 'and on behalf of the Company and the person to whom
the Option shall be granted.

14. Repurchase of Option Shares by the Company.

In the event Option shares are purchased by any individual who is an employee of
the Company or a Subsidiary pursuant to any Option granted under the Plan, and
such individual's employment shall terminate for any reason whatsoever
(including, without limitation, by reason of death, disability or retirement),
and the Company's Common Stock is not then listed on a national securities
exchange or traded on NASDAQ, and the Company in its sole and absolute
discretion elects to purchase such Option shares (the Company being under no
obligation to do so), such individual shall agree to sell to the Company all
Option shares acquired by such individual under this Plan for a purchase price
equal to the fair market value of such Option shares as determined by the
Committee based on a price that might be arrived at by a willing buyer and a
willing seller, neither being under a compulsion to buy or to sell, and taking
into account such factors as it shall deem appropriate, including, without
limitation, the restricted nature of such Option shares, including by virtue of
the provisions of the Stockholders' Agreement, the minority equity ownership
position represented by the Option shares (i.e.. such Option shares would be
valued at a lower price by virtue thereof than that which might otherwise be
calculated in respect of the relative percentage equity ownership of the Company
represented by such Option shares), and the option price established by the
Committee as applicable to the then most recent incentive stock options granted
by the Company (whether hereunder or otherwise within the meaning of Section 422
(b) of the Code), and such other factors as the Committee may deem appropriate.
The foregoing determination hereunder by the Committee of the fair market value
of the Option shares shall be conclusive and not subject to review.

15. Termination and Amendment.

The Plan, which has been adopted by the Board of Directors and by the
stockholders of the Company on October 15, 1992, shall terminate on October 14,
2002, and no Option shall be granted under the Plan after such date. The Board
of Directors may at any time prior to such date terminate the Plan or make such
modifications or amendments thereto as it shall deem advisable; provided,
however, that:

(i) no increase shall be made in the aggregate number of shares which may be
issued under, the Plan;

(ii) no such termination, modification or amendment shall materially adversely
affect the rights of a holder of an Option previously granted under the Plan;

(iii) no modification shall be made to the requirements of eligibility for
participation in the Plan; and

(iv) no material increase shall be made in the benefits accruing to participants
under the Plan.

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