Document:

Exhibit 4.3

                          REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of August 22, 2000 among Alliance Pharmaceutical Corp., a New
York corporation (the "COMPANY"), and the parties who have executed this
Agreement and whose names appear on Schedule I hereto (each party listed on
Schedule I hereto is sometimes individually referred to herein as a "PURCHASER"
and all such parties are sometimes collectively referred to herein as the
"PURCHASERS").

          This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "PURCHASE
AGREEMENT").

          The Company and the Purchasers hereby agree as follows:

     1. DEFINITIONS

          Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:

          "ADVICE" has meaning set forth in Section 3(o) hereof.

          "AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "CONTROL," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "AFFILIATED," CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.

          "AGGREGATE PRICE" has the meaning set forth in Section 2(b) hereof.

          "BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York generally are authorized or required by law or other government actions
to close.

          "CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.

          "COMMISSION" means the Securities and Exchange Commission.

          "COMMON STOCK" means the Company's Common Stock, par value $0.01 per
share.

          "DEBENTURES" means the Company's 5% convertible debentures due August
22, 2004 issuable pursuant to the Debenture and the Purchase Agreement, and
under certain conditions a second tranche of 5% convertible debentures due four
years after issuance.

          "EFFECTIVENESS DATE" means the earlier of (i) the 90th day following
the Closing Date, or (ii) the fifth business day after the Company has received
notice (written or oral) from the Commission that the Commission Staff will not
be reviewing the Registration Statement or has no further comments on the
Registration Statement.

          "EFFECTIVENESS PERIOD" has the meaning set forth in Section 2(a)
hereof.

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

          "EVENT" has the meaning set forth in Section 2(b) hereof.

          "FILING DATE" means as soon as practicable but in no event later than
the 30th day following the Closing Date.

          "HOLDER" or "HOLDERS" means the holder or holders, as the case may be,
from time to time of Registrable Securities.

          "INDEMNIFIED PARTY" has the meaning set forth in Section 5(c) hereof.

          "INDEMNIFYING PARTY" has the meaning set forth in Section 5(c) hereof.

          "INITIAL REGISTRATION STATEMENT" has the meaning set forth in Section
2(a) hereof.

          "LOSSES" has the meaning set forth in Section 5(a) hereof.

          "NASDAQ" has the meaning set forth in Section 2(b).

          "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

          "PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

          "PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.

          "REGISTRABLE SECURITIES" means the shares of Common Stock issued or
issuable upon (i) conversion of or with respect to $10,000,000 principal amount
of the Debentures, (ii) payment of interest or any other payments in respect of
the Debentures and (iii) any shares of the Company's capital stock issued with
respect to (i) or (ii) as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise.

          "REGISTRATION DELAY PAYMENT" has the meaning set forth in Section 2(b)
hereof.

          "REGISTRATION STATEMENT" means the Initial Registration Statement and
any additional registration statements contemplated by Sections 2(a), 2(b) and
7(d), including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference in
such registration statement.

          "RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

          "RULE 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

          "RULE 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

          "SECURITIES ACT" means the Securities Act of 1933, as amended.

          "TRADING DAY" means a day on which Nasdaq (or such other securities
market on which the Common Stock is listed) is open for trading.

          "UNDERLYING SHARES" means the shares of Common Stock issuable upon
conversion of the Debentures.

          "UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means a
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective registration
statement.

          2. REGISTRATION REQUIREMENTS

          (a) FILING AND EFFECTIVENESS OBLIGATIONS. On or prior to the Filing
Date, the Company shall prepare and file with the Commission a Registration
Statement (the "INITIAL REGISTRATION STATEMENT") which shall cover all
Registrable Securities for an offering to be made on a continuous basis pursuant
to a "Shelf" registration statement under Rule 415. The Initial Registration
Statement shall be on Form S-3 or any successor form (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith, subject to the reasonable consent of the Holders of the
Registrable Securities). The Company shall (i) not permit any securities other
than the Registrable Securities to be included in the Initial Registration
Statement and (ii) use its best efforts to cause the Initial Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event on or prior to the
Effectiveness Date, and to keep such Initial Registration Statement continuously
effective under the Securities Act until the date which is four years after the
date that such Initial Registration Statement is declared effective by the
Commission or such earlier date when all Registrable Securities covered by such
Initial Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144 as determined by counsel to the Company
pursuant to a written opinion letter, addressed to the Holders and the Company's
transfer agent to such effect (the "EFFECTIVENESS PERIOD"). The number of shares
of Common Stock initially included in the Initial Registration Statement shall
be no less than (a) the number of shares of Common Stock that are then issuable
upon conversion of the Debentures (based on the Conversion Price (as defined in
the Debentures) as would then be in effect at such time), without regard to any
limitation on the Investor's ability to convert the Debentures, and (b) the
number of shares of Common Stock that could be issued as payment of interest on
the Debentures for a one year period. If on the date of an actual adjustment to
the Conversion Price pursuant to Section 4.5 of the Debenture the Registration
Statements are insufficient to register all Underlying Shares (after giving
effect to such adjustment) and the number of shares of Common Stock issuable
upon the payment of interest on the principal amount of the then outstanding
Debentures for a one year period, the Company shall immediately, but in no more
than ten (10) Business Days, file a Registration Statement sufficient to
register such additional shares of Common Stock.

          (b) UNDERWRITTEN OFFERING. In addition to the Initial Registration
Statement, at any time when a Registration Statement covering the Registrable
Securities is not effective (during any period in which a Registration Statement
is required to be effective pursuant to the terms hereof), if the Holders of a
majority of the Registrable Securities covered by a Registration Statement so
elect on or after February 22, 2001 an offering of Registrable Securities
pursuant to such Registration Statement may be effected on no more than two (2)
occasions in the form of an Underwritten Offering. In such event, and if the
managing underwriters advise the Company and such Holders in writing that in
their opinion the amount of Registrable Securities proposed to be sold in such
Underwritten Offering exceeds the amount of Registrable Securities which can be
sold in such Underwritten Offering, there shall be included in such Underwritten
Offering the amount of such Registrable Securities which in the opinion of such
managing underwriters can be sold, and such amount shall be allocated pro rata
among the Holders proposing to sell Registrable Securities in such Underwritten
Offering.

          (c) UNDERWRITER. If any of the Registrable Securities are to be sold
in an Underwritten Offering, the investment banker in interest that will
administer the offering will be selected by the Holders of a majority of the
Registrable Securities included in such offering provided that the Company shall
consent to the inclusion of such investment banker, which consent shall not be
unreasonably withheld. No Holder may participate in any Underwritten Offering
hereunder unless such Holder (i) agrees to sell its Registrable Securities on
the basis provided in any underwriting agreements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such arrangements.

          (d) If (i) any of the Holders desires to sell Underlying Shares and
the Initial Registration Statement covering all the applicable Registrable
Securities required to be filed by the Company pursuant to this Agreement is not
(A) filed with the Commission on or before the Filing Date or (B) declared
effective by the Commission on or before the applicable Effectiveness Date, (ii)
on any day after the Registration Statement has been declared effective by the
Commission any of the Holders desires to sell Underlying Shares and cannot do so
pursuant to Rule 144 and (A) sales of all the Registrable Securities which such
Holders desire to sell cannot be made pursuant to the Registration Statement
(including, without limitation, because of a failure to keep the Registration
Statement effective, to disclose such information as is necessary for sales to
be made pursuant to the Registration Statement, or to register sufficient shares
of Common Stock) or (B) the Common Stock is not listed or included for quotation
on the National Market System of the Nasdaq Stock Market ("NASDAQ"), the Nasdaq
SmallCap Market, the New York Stock Exchange ("NYSE") or the American Stock
Exchange (the "AMEX") after being so listed or included for quotation or (iii)
the Company shall otherwise fail to file a Registration Statement required by
Section 2(a) hereof that is necessary in order to permit sales of Underlying
Shares that Holders desire to sell (each such event specified in (i), (ii) and
(iii) above, an "Event"), then, as partial relief for the damages to any Holder
by reason of any such delay in or reduction of its ability to sell the
Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each Holder an
amount in cash (a "REGISTRATION DELAY PAYMENT") equal to the portion of the then
outstanding principal amount of the Debentures which the Holders desired to
convert to Common Stock and sell and cannot sell under Rule 144 (and, in the
case of Holders, the principal amount of such Debentures from which such
Registrable Securities were converted) (the "AGGREGATE PRICE") multiplied by two
hundredths (.020) times the sum of: (i) the number of months (prorated for
partial months) after the end of the Effectiveness Date and prior to the date
the Registration Statement is declared effective by the Commission or such
shares can be sold under Rule 144, PROVIDED, HOWEVER, that there shall be
excluded from such period any delays which are solely attributable to changes
required by the Purchasers in the Registration Statement with respect to
information relating to the Purchasers, or to the failure of the Purchasers to
conduct their review of the Registration Statement pursuant to Section 3(a);
(ii) the number of months (prorated for partial months) that sales cannot be
made either pursuant to Rule 144 or the Registration Statement after the
Registration Statement has been declared effective (including, without
limitation, when sales cannot be made by reason of the Company's failure to
properly supplement or amend the Prospectus in accordance with the terms of this
Agreement, or otherwise, but excluding when such sales cannot be made solely by
reason of any act or omission solely attributable to the Purchasers); and (iii)
the number of months (prorated for partial months) that the Common Stock is not
listed or included for quotation on the Nasdaq, NYSE or AMEX or that trading
thereon is halted after the Registration Statement has been declared effective.
The Company shall pay any Required Registration Delay Payments to each Holder in
cash on the last Business Day of each month during which an Event has occurred
and is continuing. In the event the Company fails to make a Registration Delay
Payment within ten (10) Business Days of the date such Registration Delay
Payment is due, such Registration Delay Payment shall bear interest at the rate
of 2.0% per month (prorated for partial months) until paid in full.

          (e) The Company represents and warrants that it meets the registrant
eligibility and transaction requirements for the use of Form S-3 (for secondary
offerings) for the registration of the sale of Registrable Securities by the
Purchasers and any other Holders and the Company shall file all reports required
to be filed by the Company with the Commission in a timely manner so as to
maintain such eligibility for the use of Form S-3.

          3. REGISTRATION PROCEDURES

          In connection with the Company's registration obligations hereunder,
the Company shall:

          (a) PREPARATION OF REGISTRATION STATEMENT. Prepare and file with the
Commission on or prior to the Filing Date a Registration Statement on Form S-3
or its successor form (or if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3 such registration shall be on
another appropriate form in accordance herewith (which shall include a plan of
distribution reasonably agreed upon by the parties hereto, in the form of
EXHIBIT A annexed hereto, unless in connection with an Underwritten Offering) or
in connection with an Underwritten Offering hereunder, such other form agreed to
by the Company and by a majority-in-interest of Holders of Registrable
Securities to be covered by such Registration Statement) (except if otherwise
directed by the Holders), and cause the Registration Statement to become
effective and remain effective as provided herein; PROVIDED, HOWEVER, that not
less than five (5) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated therein by reference), the
Company shall, if reasonably practicable (i) furnish to the Holders, their
counsel and any managing underwriters, copies of all such documents proposed to
be filed (including documents incorporated by reference), which documents will
be subject to the review of such Holders, their counsel and such managing
underwriters, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to such Holders and such
underwriters, to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders of
a majority of the Registrable Securities, their counsel or any managing
underwriters shall reasonably object within three (3) Business Days after
receipt of copies of any such documents, and will not request acceleration of
such Registration Statement without prior notice to such counsel. The sections
of such Registration Statement covering information with respect to the Holders,
the Holder's beneficial ownership of securities of the Company or the Holders
intended method of disposition of Registrable Securities shall conform to the
information provided to the Company by each of the Holders.

          (b) AMENDMENTS. (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective
for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act; (iii)
respond as promptly as possible to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and as
promptly as possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented. In the event the number of shares available under
a Registration Statement filed pursuant to this Agreement is insufficient to
cover the number of the Registrable Securities required by Section 2(a) hereof,
the Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefore, if applicable), or both, so as
to cover such number of the Registrable Securities, in each case, as soon as
practicable, but in any event within ten (10) Business Days after the necessity
therefor arises (based on the Conversion Price of the Debentures and other
relevant factors on which the Company reasonably elects to rely). The Company
shall use its best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof. The provisions of Section 2(b) above shall be applicable with respect
to such obligation, with the ninety (90) days running from the day after the
date on which the Company reasonably first determines (or reasonably should have
determined) the need therefor.

          (c) NOTIFICATIONS. Notify the Holders of Registrable Securities to be
sold, their counsel and any managing underwriters as promptly as possible (and,
in the case of (i)(A) below, not less than five (5) days prior to such filing
and, in the case of (i)(C) below, not later than the first Business Day after
effectiveness) and (if requested by any such Person) confirm such notice in
writing no later than one (1) Business Day following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) if at any time any of
the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

          (d) SUSPENSIONS. Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

          (e) SUPPLEMENTS AND POST-EFFECTIVE AMENDMENTS. If requested by any
managing underwriter or the Holders of a majority in interest of the Registrable
Securities to be sold in connection with an Underwritten Offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably agrees should
be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; PROVIDED, HOWEVER, that the
Company shall not be required to take any action pursuant to this Section 3(e)
that would, in the opinion of counsel, reasonably acceptable to the purchasers,
for the Company, violate applicable law.

          (f) COPIES OF REGISTRATION STATEMENT. Furnish to each Holder, their
counsel, and any managing underwriters, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

          (g) COPIES OF PROSPECTUS. Promptly deliver to each Holder, their
counsel, and any underwriters, without charge, as many copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders and any underwriters in connection with
the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto.

          (h) BLUE SKY. Prior to any public offering of Registrable Securities,
use its best efforts to register or qualify or cooperate with the selling
Holders, any underwriters and their counsel in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and to do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by a Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.

          (i) CERTIFICATES. Cooperate with the Holders and any managing
underwriters to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
applicable law and the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such managing underwriters or Holders may request at least two
(2) Business Days prior to any sale of Registrable Securities.

          (j) SUPPLEMENTS AND AMENDMENTS. Upon the occurrence of any event
contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement
or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration Statement
nor such Prospectus will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

          (k) LISTING. Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on Nasdaq and any other
securities exchange, quotation system, market or over-the-counter bulletin
board, if any, on which similar securities issued by the Company are then listed
as and when required pursuant to the Purchase Agreement.

          (l) UNDERWRITING AGREEMENT. Enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in
Underwritten Offerings) and take all such other actions in connection therewith
(including those reasonably requested by any managing underwriters and the
Holders of a majority of the Registrable Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities, and
whether or not an underwriting agreement is entered into, (i) make such
representations and warranties to such Holders and such underwriters as are
customarily made by issuers to underwriters in underwritten public offerings,
and confirm the same if and when requested; (ii) in the case of an Underwritten
Offering obtain and deliver copies thereof to the managing underwriters, if any,
or in the case of non-Underwritten Offerings, if reasonably requested by the
selling Holders, obtain and deliver copies thereof to such selling Holders, of
opinions of counsel to the Company and updates thereof addressed to each such
underwriter, in form, scope and substance reasonably satisfactory to any such
managing underwriters and counsel to the selling Holders covering the matters
customarily covered in opinions requested in Underwritten Offerings and such
other matters as may be reasonably requested by such counsel and underwriters;
(iii) immediately prior to the effectiveness of the Registration Statement, and,
in the case of an Underwritten Offering, at the time of delivery of any
Registrable Securities sold pursuant thereto, and, in the case of
non-Underwritten Offerings, at such time as the selling Holders may reasonably
request, obtain and deliver copies to the Holders and the managing underwriters,
if any, of "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if required, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data is, or is required to be, included in the Registration
Statement), addressed to each of the underwriters, if any, in form and substance
as are customary in connection with Underwritten Offerings; (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable to the selling Holders and the
underwriters, if any, than those set forth in Section 5 (or such other
provisions and procedures acceptable to the managing underwriters, if any, and
holders of a majority of Registrable Securities participating in such
Underwritten Offering; and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable Securities
being sold, their counsel and any managing underwriters to evidence the
continued validity of the representations and warranties made pursuant to clause
3(1)(i) above and to evidence compliance with any customary conditions contained
in the underwriting agreement or other agreement entered into by the Company.

          (m) DUE DILIGENCE. Make available for inspection by the selling
Holders, any representative of such Holders, any underwriter participating in
any disposition of Registrable Securities, and any attorney or accountant
retained by such selling Holders or underwriters, at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors, agents and employees of the
Company and its subsidiaries to supply all information in each case reasonably
requested by any such Holder, representative, underwriter, attorney or
accountant in connection with the Registration Statement; PROVIDED, HOWEVER,
that if any information is determined in good faith by the Company in writing to
be of a confidential nature at the time of delivery of such information, then
prior to delivery of such information, the Company and the Holders shall enter
into a confidentiality agreement reasonably acceptable to the Company and the
Holders providing that such information shall be kept confidential, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities (PROVIDED,
HOWEVER, that the Company shall be given notice of any such pending disclosure
so that the Company may seek a protective order); (ii) disclosure of such
information, in the opinion of counsel to such Person, is required by law; (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such Person; or (iv) such
information becomes available to such Person from a source other than the
Company and such source is not known by such Person to be bound by a
confidentiality agreement with the Company.

          (n) EARNINGS STATEMENT. Comply in all material respects with all
applicable rules and regulations of the Commission and make generally available
to its securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 not later than 45 days after the end of
any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts Underwritten Offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.

          (o) INFORMATION. The Company may require each selling Holder to
furnish to the Company information regarding such Holder and the distribution of
such Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.

          The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such confidential information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such confidential information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such confidential information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction, or (iv) such confidential information has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company agrees that it shall, if possible, upon
learning that disclosure of such information concerning a Holder is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Holder prior to making such disclosure, and
allow the Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

          If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar Federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.

          Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.

          Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "ADVICE")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of a Holder in accordance with the terms of the Securities Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which an Holder has entered into a binding contract for sale prior to the
Holder's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi)
and for which the Holder has not yet settled.

          (p) RESPONSES TO THE COMMISSION. The Company agrees to respond fully
and completely, in the Company's best judgement, to any and all comments on a
Registration Statement received from the Commission staff as promptly as
possible but, for non-Underwritten Offerings, in no event later than ten (10)
Business Days of the receipt of such comments, regardless of whether such
comments are in oral or written form...

          (q) CONFIRMATION OF EFFECTIVENESS. Within two (2) Business Days after
a Registration Statement which covers applicable Registrable Securities is
ordered effective by the Commission, the Company shall deliver, and shall cause
legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holders whose Registrable Securities
are included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the Commission in the form attached
hereto as Exhibit B.

          4. REGISTRATION EXPENSES

          (a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company, whether or not
pursuant to an Underwritten Offering and whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without limitation
(and except as provided herein), (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with Nasdaq and each other securities exchange or market on
which Registrable Securities are required hereunder to be listed and (B) in
compliance with state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Holders in connection with
Blue Sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or the Holders of a majority
of Registrable Securities may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriters, if any, or by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and counsel for the Holders, (v) Securities Act liability insurance, if
the Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

          (b) If the Holders require an Underwritten Offering pursuant to the
terms hereof, the Company shall be responsible for all reasonable costs, fees
and expenses in connection therewith, except for the fees and disbursements of
the Underwriters (including any underwriting commissions and discounts) and
their legal counsel and accountants (which shall be borne by the Holders).
Therefore, in such circumstances the Holder shall bear the expenses of the fees
and disbursements of any legal counsel or accounting firm retained by the
underwriters in connection with such Underwritten Offering and the costs of any
determination (but not filing) by the underwriters of the eligibility of the
Registrable Securities for investment under the applicable state securities
laws. By way of illustration which is not intended to diminish from the
provisions of Section 4(a), the Holders shall not be responsible for, and the
Company shall be required to pay the fees or disbursements incurred by the
Company (including by its legal counsel and accountants) in connection with, the
preparation and filing of a Registration Statement and related Prospectus for
such offering, the maintenance of such Registration Statement in accordance with
the terms hereof, the listing of the Registrable Securities in accordance with
the requirements hereof, and printing expenses incurred to comply with the
requirements hereof.

          5. INDEMNIFICATION

          (a) INDEMNIFICATION BY THE COMPANY. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents (including any underwriters retained by such Holder
in connection with the offer and sale of Registrable Securities), brokers
(including brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all joint or several losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, "LOSSES"), as incurred, arising out of or
relating to (i) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made),
except to the extent, but only to the extent, that such untrue statements or
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, which
information was reasonably relied on by the Company for use therein or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of prospectus or in any amendment or
supplement thereto (provided that the Company amended any disclosure with
respect to the method of distribution upon written notice from the Holders that
such section of the Prospectus should be revised in any way) or (ii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of
Registrable Securities. The Company shall not, however, be liable for any Losses
to any Holder with respect to any untrue or alleged untrue statement of material
fact or omission or alleged omission of material fact if such statement or
omission was made in a preliminary Prospectus and such Holder did not receive a
copy of the final Prospectus (or any amendment or supplement thereto) at or
prior to the confirmation of the sale of the Registrable Securities in any case
where such delivery is required by the Securities Act and the untrue or alleged
untrue statement of material fact or omission or alleged omission of material
fact contained in such preliminary Prospectus was corrected in the final
Prospectus (or any amendment or supplement thereto), unless the failure to
deliver such final Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 3(g) of this Agreement. The Company
shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.

          (b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent, that
such untrue statement or omission is contained in any information so furnished
in writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus; PROVIDED, HOWEVER, that the indemnity
agreement contained in this Section 5(b) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior
written consent of such Holder, which consent shall not be unreasonably
withheld. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.

          (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"INDEMNIFIED PARTY"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; PROVIDED,
HOWEVER, that the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

          All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party, which notice
shall be delivered no more frequently than on a monthly basis (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

          (d) CONTRIBUTION. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or refusal of a
court of competent jurisdiction to enforce such indemnification in accordance
with its terms (by reason of public policy or otherwise), then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms. In no
event shall any selling Holder be required to contribute an amount under this
Section 5(d) in excess of the net proceeds received by such Holder upon sale of
the Registrable Securities pursuant to the Registration Statement giving rise to
such contribution obligation.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

          6. RULE 144

          As long as any Holder owns Registrable Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or l5(d) of the Exchange
Act and to promptly furnish the Holders with true and complete copies of all
such filings. As long as any Holder owns Registrable Securities, if the Company
is not required to file reports pursuant to Section 13(a) or l5(d) of the
Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Underlying Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions referred to in the
Purchase Agreement. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.

          7. MISCELLANEOUS

          (a) REMEDIES. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

          (b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any of its
subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Except as disclosed in Schedule 2.1(r) of the Purchase Agreement, neither the
Company nor any of its subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person. Without limiting the generality of the foregoing, without the written
consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act
unless the rights so granted are subordinated in all respects to the rights in
full of the Holders set forth in Section 2 herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement; notwithstanding
the foregoing, the Company may grant pari passu rights to a Strategic Partner
(as defined in the Debenture). This Agreement, together with the Purchase
Agreement, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters.

          (c) NO PIGGYBACK ON REGISTRATIONS. Except as disclosed on Schedule
2.1(r) of the Purchase Agreement, neither the Company nor any of its
securityholders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statements and the Company
shall not after the date hereof enter into any agreement providing such right to
any of its securityholders, unless the right so granted is subordinated in all
respects to the rights in full of the Holders set forth herein, and is not
otherwise in conflict or inconsistent with the provisions of this Agreement;
notwithstanding the foregoing, the Company may grant pari passu rights to a
Strategic Partner (as defined in the Debenture).

          (d) PIGGY-BACK REGISTRATIONS. Except as provided herein if, at any
time when there is not an effective Registration Statement covering the
Registrable Securities, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such determination and, if within fifteen (15) days after
receipt of such notice, any such Holder shall so request in writing, (which
request shall specify the Registrable Securities intended to be disposed of by
the Holders), the Company will use reasonable efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the Holder, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered; PROVIDED,
that if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay expenses in accordance with
Section 4 hereof), and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities being
registered pursuant to this Section 7(d) for the same period as the delay in
registering such other securities. The Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; PROVIDED, HOWEVER, that the Company shall not
be required to register any Registrable Securities pursuant to this Section 7(d)
that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the
case of an underwritten public offering, if the managing underwriter(s) or
underwriter(s) should reasonably object to the inclusion of the Registrable
Securities in such registration statement, then if the Company after
consultation with the Underwriter's representative should reasonably determine
that the inclusion of such Registrable Securities would materially adversely
affect the offering contemplated in such registration statement, and based on
such determination recommends inclusion in such registration statement of fewer
Registrable Securities then proposed to be sold by the Holders, then (x) the
number of Registrable Securities of the Holders included in such registration
statement shall be reduced pro rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration) or (y) none
of the Registrable Securities of the Holders shall be included in such
registration statement if the Company, after consultation with the
underwriter(s), recommends the inclusion of none of such Registrable Securities;
PROVIDED, HOWEVER, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company). Notwithstanding the foregoing,
without the prior written consent of Holders of a majority of the Registrable
Securities, the Company shall not file any registration statement under the
Securities Act (other than on Form S-4 or Form S-8) relating to the offer and
sale of any equity securities of the Company, or offer or sell any equity
securities of the Company in a transaction exempt from registration pursuant to
Regulation S under the Securities Act until the earlier of (i) such time as the
Initial Registration Statement has been effective for a period of sixty (60)
Trading Days, which period shall be tolled if and during the period the
effectiveness of the Initial Registration Statement is suspended for any reason
whatsoever or (ii) all of the Registrable Securities covered therein shall have
been sold; provided, further, that in the case of warrants or other securities
which the Company has issued with piggy-back registration rights, as set forth
on Schedule 2.1(r) to the Securities Purchase Agreement, the Company shall be
allowed to file a separate registration statement during the same time period as
the Initial Registration Statement and/or any Registration Statement being filed
pursuant to this sentence.

          (e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least two thirds of the then outstanding Registrable
Securities; PROVIDED, HOWEVER, that for the purposes of this sentence,
Registrable Securities that are owned, directly or indirectly, by the Company,
or an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.

          (f) NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by
8:00 p.m. EST where such notice is to be received), or the first Business Day
following such delivery (if received after 8:00 p.m. EST where such notice is to
be received) or (b) on the second Business Day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications are (i) if to the Company to Alliance Pharmaceutical Corp.,
6175 Lusk Boulevard, San Diego, California 92121, Attention: President,
facsimile number: (858) 410-5343 with a copy to Stroock & Stroock & Lavan LLP,
180 Maiden Lane, New York, New York 10038, Attention: Melvin Epstein, facsimile
number: (212) 806-6006 and (ii) if to any Purchaser to the address set forth on
Schedule I hereto with copies to those specified on the signature pages hereto
and to Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, New York,
New York 10022, Attn: James Kaye, Esq., fax no. (212) 872-1002 or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.

          (g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder, which will not be unreasonably withheld. Each Holder may assign its
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement. In addition, the rights of each Holder hereunder, including
the right to have the Company register for resale Registrable Securities in
accordance with the terms of this Agreement, shall be automatically assignable
by each Holder if: (i) the Holder agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws, (iv) at or before
the time the Company receives the written notice contemplated by clause (ii) of
this Section, the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions of this Agreement, and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.

          (h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.

          (i) GOVERNING LAW. The corporate laws of the State of New York shall
govern all issues concerning the relative rights of the Company and the
Purchasers as its stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consent to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

          (j) CUMULATIVE REMEDIES. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

          (k) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

          (l) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (m) SHARES HELD BY THE COMPANY AND ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                    ALLIANCE PHARMACEUTICAL CORP.

                                    By:
                                        -----------------------------------
                                        Name:
                                               ---------------
                                        Title:
                                               ---------------

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

                                    By:
                                        -----------------------------------
                                        ---------------
                                        ---------------

<PAGE>

                                   SCHEDULE I

COMPANY:
-------

ALLIANCE PHARMACEUTICAL CORP.
6175 Lusk Boulevard
San Diego, California 92121
Attention:  President
Facsimile: (858) 410-5343

PURCHASERS:
----------

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<PAGE>

                                                                  EXHIBIT A

                              PLAN OF DISTRIBUTION

          The Company is registering the Registrable Securities on behalf of the
Holder. As used herein, the term Holder means the holder of the Registrable
Securities and includes donees and pledgees selling Registrable Securities
received from a named Holder after the date of this Prospectus. All costs,
expenses and fees in connection with the registration of the Registrable
Securities offered hereby will be borne by the Company. Brokerage commissions
and similar selling expenses, if any, attributable to the sale of Registrable
Securities will be borne by the Holders. Sales of Registrable Securities may be
effected by Holders from time to time in one or more types of transactions
(which may include block transactions) on the Nasdaq National Market, in the
over-the-counter market, in negotiated transactions, through put or call options
transactions relating to the Registrable Securities, through short sales of
Registrable Securities, or a combination of such methods of sale, at market
prices prevailing at the time of sale, or at negotiated prices. Such
transactions may or may not involve brokers or dealers. The Holders have advised
the Company that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of their
securities, nor is there an underwriter or coordinated broker acting in
connection with the proposed sale of Registrable Securities by the Holders.

          The Holders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Registrable Securities or of securities convertible into or exchangeable for the
Registrable Securities in the course of hedging positions they assume with
Holders. The Holders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of Registrable Securities
offered by this Prospectus, which Registrable Securities such broker-dealer or
other financial institution may resell pursuant to this Prospectus (as amended
or supplemented to reflect such transaction).

          The Holders may effect such transactions by selling Registrable
Securities directly to purchasers or to or through broker-dealers, which may act
as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from Holders and/or the purchasers
of Registrable Securities for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

          The Holders and any broker-dealers that act in connection with the
sale of Registrable Securities might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
such broker-dealers any profit on the resale of the Registrable Securities sold
by them while acting as principals might be deemed to be underwriting discounts
or commissions under the Securities Act. The Company has agreed to indemnify
each Holder against certain liabilities, including liabilities arising under the
Securities Act. The Holders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the
Registrable Securities against certain liabilities, including liabilities
arising under the Securities Act.

          The Holders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act.

          The Holders will be subject to the prospectus delivery requirements of
the Securities Act. The Company has informed the Holders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.

          Holders also may resell all or a portion of the Registrable Securities
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.

          Upon the Company being notified by a Holder that any material
arrangement has been entered into with a broker-dealer for the sale of
Registrable Securities through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this Prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Holder and
of the participating broker-dealer(s), (ii) the number of Registrable Securities
involved, (iii) the initial price at which such Registrable Securities were
sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this Prospectus and (vi) other facts material to the transactions.
In addition, upon the Company being notified by a Holder that a donee or pledgee
intends to sell more than 500 Registrable Securities, a supplement to this
Prospectus will be filed.

<PAGE>

                                                                  EXHIBIT B

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[TRANSFER AGENT]
Attn.:

          Re: Alliance Pharmaceutical Corp.

Ladies and Gentlemen:

          We are counsel to Alliance Pharmaceutical Corp., a New York
corporation (the "Company"), and have represented the Company in connection with
that certain Securities Purchase Agreement (the "Purchase Agreement") entered
into by and among the Company and the buyers named therein (collectively, the
"Holders") pursuant to which the Company issued to the Holders its 5%
convertible debentures due August 22, 2004 (the "Debentures") convertible into
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"). Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Holders (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the
Debentures, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________, 2000, the Company filed a Registration Statement on
Form S-3 (File No. 333-_____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.

          In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                                            Very truly yours,
                                            [ISSUER'S COUNSEL]

CC:  [LIST NAMES OF HOLDERS]MINDARROW SYSTEMS, INC.
                    2000 STOCK INCENTIVE PLAN

1.   The Plan.

1.1  Purpose.  The purpose of this Plan is to promote the success
     of the Company and the interests of its stockholders by
     attracting, motivating, retaining and rewarding certain officers,
     employees, directors and other eligible persons with awards and
     incentives for high levels of individual performance and improved
     financial performance of the Company.  Capitalized terms used
     herein are defined in Section 5.

1.2  Administration and Authorization; Power and Procedure.

     1.2.1     Committee.  This Plan will be administered by and all
          Awards will be authorized by the Committee.  Action of the
          Committee with respect to its authority under this Plan shall be
          taken pursuant to a majority vote or by unanimous written consent
          of its members.

     1.2.2     Plan Awards; Interpretation; Powers of Committee.
          Subject to the express provisions of this Plan and any express
          limitations on the delegated authority of a Committee, the
          Committee will have the authority to:

          (a)  determine eligibility and the particular Eligible Persons
               who will receive Awards;

          (b)  grant Awards to Eligible Persons, determine the price at
               which securities will be offered or awarded and the amount of
               securities to be offered or awarded to any of such persons, and
               determine the other specific terms and conditions of Awards
               consistent with the express limits of this Plan, establish the
               installments (if any) in which such Awards will become
               exercisable or will vest, and the respective consequences
               thereof, or determine that no delayed exercisability or vesting
               is required, and establish the events of termination or reversion
               of such Awards;

          (c)  approve the forms of Award Agreements, which need not be
               identical either as to type of Award or among Participants;

          (d)  construe and interpret this Plan and any Award or other
               agreements defining the rights and obligations of the Company and
               Participants under this Plan, further define the terms used in
               this Plan, and prescribe, amend and rescind rules and regulations
               relating to the administration of this Plan;

          (e)  cancel, modify, or waive the Corporation's rights with
               respect to, or modify, discontinue, suspend, or terminate any or
               all outstanding Awards held by Eligible Persons, subject to any
               required consent under Section 4.5;

<PAGE>
          (f)  accelerate or extend the exercisability or extend the term
               of any or all outstanding Awards within the maximum ten-year term
               of Awards under Sections 2.2.2 and 3.4;

          (g)  determine the duration and purposes of leaves of absence
               that may be granted to Participants without constituting a
               termination of their employment for purposes of this Plan; and

          (h)  make all other determinations and take such other action as
               contemplated by this Plan or as may be necessary or advisable for
               the administration of this Plan and the effectuation of its
               purposes.

     1.2.3     Binding Determinations.  Any action taken by, or
          inaction of, the Corporation, any Subsidiary, the Board or the
          Committee relating or pursuant to this Plan will be within the
          absolute discretion of that entity or body and will be conclusive
          and binding upon all persons.  Subject only to compliance with
          the express provisions hereof, the Board and Committee may act in
          their absolute discretion in matters within their authority
          related to this Plan.

     1.2.4     Reliance on Experts.  In making any determination or in
          taking or not taking any action under this Plan, the Committee or
          the Board, as the case may be, may obtain and may rely upon the
          advice of experts, including employees of and professional
          advisors to the Corporation.

     1.2.5     Delegation. The Committee may delegate ministerial, non-
          discretionary functions to individuals who are officers or
          employees of the Company.

     1.2.6     No Liability. No director, officer or agent of the
          Company will be liable for any action, omission or decision under
          the Plan taken, made or omitted in good faith.

1.3  Participation. Awards may be granted by the Committee only
     to those persons that the Committee determines to be Eligible
     Persons.  An Eligible Person who has been granted an Award may,
     if otherwise eligible, be granted additional Awards if the
     Committee so determines.

1.4  Shares Available for Awards; Share Limits.

     1.4.1     Shares Available.  Subject to the provisions of
          Section 4.2, the capital stock that may be delivered under this
          Plan will be shares of the Corporation's authorized but unissued
          Common Stock and any of its shares of Common Stock held as
          treasury shares.  The shares may be delivered for any lawful
          consideration.

     1.4.2     Share Limits.  The maximum number of shares of Common
          Stock that may be delivered pursuant to Awards granted under this
          Plan will not exceed 2,000,000 shares (the "Share Limit").  The
          maximum number of shares subject to Options that are granted
          during any calendar year to any one individual will be limited to
          1,000,000 shares and the maximum individual limit on the number
          of shares in the aggregate subject to all Awards that during any
          calendar year are granted

<PAGE>
          under this Plan to any one individual
          will be 1,000,000 shares.  Each of the foregoing numerical limits
          will be subject to adjustment as contemplated by this Section 1.4
          and Section 4.2.

     1.4.3     Share Reservation; Replenishment and Reissue of
          Unvested Awards.  Shares subject to outstanding Awards shall be
          reserved for issuance.  No Award may be granted under this Plan
          unless, on the date of grant, the sum of (a) the maximum number
          of shares of Common Stock issuable at any time pursuant to such
          Award, plus (b) the number of shares of Common Stock that have
          previously been issued pursuant to Awards granted under this
          Plan, other than reacquired shares available for reissue
          consistent with any applicable legal limitations, plus (c) the
          maximum number of shares of Common Stock that may be issued at
          any time after such date of grant pursuant to Awards that are
          outstanding on such date, does not exceed the Share Limit.
          Shares of Common Stock that are subject to or underlie Awards
          that expire or for any reason are canceled or terminated, are
          forfeited, fail to vest, or for any other reason are not paid or
          delivered under this Plan, as well as reacquired shares, will
          again, except to the extent prohibited by law (or the provisions
          of the Code, in the case of Incentive Stock Options) or the terms
          of this Plan, (or, in the case of Incentive Stock Options, the
          provisions of the Internal Revenue Code) be available for
          subsequent Awards under this Plan.  Accordingly, shares of Common
          Stock issued pursuant to the terms hereof (including shares of
          Common Stock offset in satisfaction of applicable withholding
          taxes or the exercise price of an Award) in respect of an Award
          shall reduce on a share-for-share basis the number of shares of
          Common Stock remaining available under this Plan and the number
          of shares remaining subject to the Award.

1.5  No Transferability; Limited Exception to Transfer
     Restrictions.

     1.5.1     Limit On Exercise and Transfer.  Unless otherwise
          expressly provided in (or pursuant to) this Section 1.5, by
          applicable law and by the Award Agreement, as the same may be
          amended:

          (a)  all Awards are non-transferable and will not be subject in
               any manner to sale, transfer, anticipation, alienation,
               assignment, pledge, encumbrance or charge;

          (b)  Awards will be exercised only by the Participant; and
          (c)  amounts payable or shares issuable pursuant to an Award will
               be delivered only to (or for the account of) the Participant.
          In addition, the shares shall be subject to the
          restrictions set forth in the applicable Award Agreement.

<PAGE>
     1.5.2     Further Exceptions to Limits On Transfer. The exercise
          and transfer restrictions in Section 1.5.1 will not apply to:

          (a)  transfers to the Corporation or, with the express written
               approval of the Committee, transfers by gift to "immediate
               family" as that term is defined in SEC Rule 16a-1(e) promulgated
               under the Exchange Act;

          (b)  the designation of a beneficiary to receive benefits if the
               Participant dies or, if the Participant has died, transfers to or
               exercises by the Participant's beneficiary, or, in the absence of
               a validly designated beneficiary, transfers by will or the laws
               of descent and distribution; or

          (c)  if the Participant has suffered a disability, permitted
               transfers or exercises on behalf of the Participant by the
               Participant's duly authorized legal representative.
          Notwithstanding anything else in this Section 1.5.2 to
          the contrary, Incentive Stock Options and Restricted
          Stock Awards will be subject to any and all transfer
          restrictions under the Code applicable to such awards
          or necessary to maintain the intended tax consequences
          of such Awards.

1.6  Acceptance of Notes to Finance Exercise/Purchase.  The
     Corporation may, with the Committee's approval in each specific
     case, accept one or more notes from any Eligible Person in
     connection with the exercise, purchase or acquisition of any
     Award; provided that any such note shall be subject to the
     following terms and conditions:

          (a)  The principal of the note shall not exceed the amount
               required to be paid to the Corporation upon the exercise,
               purchase or acquisition of one or more Awards under the Plan and
               the note shall be delivered directly to the Corporation in
               consideration of such exercise, purchase or acquisition.

          (b)  The initial term of the note shall be determined by the
               Committee; provided that the term of the note, including
               extensions, shall not exceed a period of five years.
          (c)  The note shall provide for full recourse to the Participant
               and shall bear interest at a rate determined by the Committee,
               but not less than the interest rate necessary to avoid the
               imputation of interest under the Code and to avoid any adverse
               accounting consequences in connection with the exercise, purchase
               or acquisition.
          (d)  If the employment or services of the Participant by or to
               the Company terminates, the unpaid principal balance of the note
               shall become due and payable on the 30th business day after such
               termination; provided, however, that if a sale of such shares
               would cause such Participant to incur liability under Section
               16(b) of the Exchange Act, the unpaid balance shall become due
               and payable on the 10th business day after the first day on which
               a sale of such shares could have been made without incurring such

<PAGE>
               liability assuming for these purposes that there are no other
               transactions (or deemed transactions) in securities of the
               Corporation by the Participant subsequent to such termination.
          (e)  If required by the Committee or by applicable law, the note
               shall be secured by a pledge of any shares or rights financed
               thereby or other collateral, in compliance with applicable law.
          (f)  The terms, repayment provisions, and collateral release
               provisions of the note and the pledge securing the note shall
               conform with all applicable rules and regulations, including
               those of the Federal Reserve Board and under the Delaware
               Corporations Code, as then in effect.
2.   Options.

2.1  Option Grants.

     2.1.1     Approval; Number of Shares.  The Committee may grant
          one or more Options under this Plan to any Eligible Person.
          Subject to the express provisions of this Plan, the Committee
          will determine the number of shares of Common Stock subject to
          each Option.

     2.1.2     Award Agreement.  Each Option will be evidenced by an
          Award Agreement signed by the Corporation and, to the extent
          required by the Committee, by the Participant and the
          Participant's spouse.  The Award Agreement evidencing an Option
          shall contain the terms established by the Committee for that
          Option, as well as any other terms, provisions, or restrictions
          that the Committee may impose on the Option or any shares of
          Common Stock subject to the Option.

     2.1.3     Type of Options.  The Committee will designate each
          Option granted under this Plan as either an Incentive Stock
          Option or a Nonqualified Stock Option and such designation shall
          be set forth in the applicable Award Agreement.  Any Option
          granted hereunder that is not designated as an Incentive Stock
          Option will be deemed to be designated a Nonqualified Stock
          Option under this Plan and not an incentive stock option under
          the Code.  Incentive Stock Options shall be subject to the
          provisions of Section 2.4 in addition to the provisions hereof
          applicable to Options generally.

2.2  Vesting; Term; Exercise Procedure.

     2.2.1     Vesting.  An Option may be exercised only to the extent
          that it is vested and exercisable.  The Committee will determine
          the vesting and/or exercisability provisions of each Option,
          which provisions will be set forth in the applicable Award
          Agreement.  Unless the Committee otherwise expressly provides, no
          Option will be exercisable or will vest until at least six months
          after the initial Award Date, and once exercisable an Option will
          remain exercisable until the expiration or earlier termination of
          the Option.  To the extent required to satisfy applicable securities
          laws and subject to Section 2.6, no Option (except an Option

<PAGE>
          granted to an officer, director, or consultant of the
          Company) shall vest and become exercisable at a rate of less than
          20% per year over five years after the date the Option is
          granted.

     2.2.2     Term.  Each Option shall expire not more than 10 years
          after its date of grant.  Each Option will be subject to earlier
          termination as provided in or pursuant to Sections 2.6 or 4.2.
          Any payment of cash or delivery of stock in payment of or
          pursuant to an Option may be delayed until a future date if
          specifically authorized by the Committee in writing and by the
          Participant.

     2.2.3     Exercise Procedure.  Any exercisable Option will be
          deemed to be exercised when the Corporation receives written
          notice of such exercise from the Participant (on a form and in
          such manner as may be required by the Committee), together with
          any required payment made in accordance with Section 2.3.2 and
          Section 4.4 and any written statement required pursuant to
          Section 4.3.

     2.2.4     Fractional Shares/Minimum Issue.  Fractional share
          interests will be disregarded, but may be accumulated. The
          Committee, however, may determine that cash, other securities, or
          other property will be paid or transferred in lieu of any
          fractional share interests.  No fewer than 100 shares may be
          purchased on exercise of any Option at one time unless the number
          purchased is the total number at the time available for purchase
          under the Option.

2.3  Option Price.

     2.3.1     Pricing Limits.  Subject to the following provisions of
          this Section 2.3.1, the Committee will determine the purchase
          price per share of the Common Stock covered by each Option (the
          "exercise price" of the Option) at the time of the grant of the
          Option, which purchase price will be set forth in the applicable
          Award Agreement.  In no case will the exercise price of an Option
          be less than the greater of:

          (a)  the par value of the Common Stock;

          (b)  in the case of a Nonqualified Stock Option and subject to
               clause (d) below, 85% of Fair Market Value of the Common Stock on
               the date of grant;
          (c)  in the case of an Incentive Stock Option and subject to
               clause (d) below, 100% of the Fair Market Value of the Common
               Stock on the date of grant; or
          (d)  in the case of an Option (incentive or nonqualified) granted
               to a Participant described in Section 2.5, 110% of the Fair
               Market Value of the Common Stock on the date of grant.
     2.3.2     Payment Provisions.  The Corporation will not be
          obligated to deliver certificates for the shares of Common Stock
          to be purchased on exercise of an Option unless and until it
          receives full payment of the exercise price therefor, all

<PAGE>    related withholding obligations under Section 4.4 have been satisfied,
          and all other conditions to the exercise of the Option set forth
          herein or in the Award Agreement have been satisfied.  The
          purchase price of any shares of Common Stock purchased on
          exercise of an Option must be paid in full at the time of each
          purchase in one or a combination of the following methods:

          (a)  in cash or by electronic funds transfer;

          (b)  by certified or cashier's check payable to the order of the
               Corporation;
          (c)  by notice and third party payment in such manner as may be
               authorized by the Committee;
          (d)  by the delivery of shares of Common Stock already owned by
               the Participant; provided that the Committee may, in its absolute
               discretion, limit the Participant's ability to exercise an Option
               by delivering previously owned shares, and any shares of Common
               Stock delivered that were initially acquired from the Corporation
               upon exercise of a stock option or otherwise must have been owned
               by the Participant at least 6 months as of the date of delivery;
or
          (e)  if authorized by the Committee or specified in the
               applicable Award Agreement, by a promissory note of the
               Participant consistent with the requirements of Section 1.6.

          Shares of Common Stock used to satisfy the exercise
          price of an Option will be valued at their Fair Market
          Value on the date of exercise.

2.4  Limitations on Grant and Terms of Incentive Stock Options.

     2.4.1     $100,000 Limit.  To the extent that the aggregate "Fair
          Market Value" of stock with respect to which incentive stock
          options first become exercisable by a Participant in any calendar
          year exceeds $100,000, taking into account both Common Stock
          subject to Incentive Stock Options under this Plan and stock
          subject to incentive stock options under all other plans of the
          Company or any parent corporation, such options will be treated
          as Nonqualified Stock Options.  For this purpose, the "Fair
          Market Value" of the stock subject to options will be determined
          as of the date the options were awarded.  In reducing the number
          of options treated as incentive stock options to meet the
          $100,000 limit, the most recently granted options will be reduced
          (recharacterized as Nonqualified Stock Options) first.  To the
          extent a reduction of simultaneously granted options is necessary
          to meet the $100,000 limit, the Committee may, in the manner and
          to the extent permitted by law, designate which shares of Common
          Stock are to be treated as shares acquired pursuant to the
          exercise of an Incentive Stock Option.

     2.4.2     Other Code Limits.  Incentive Stock Options may only be
          granted to employees of the Corporation or a Subsidiary that
          satisfy the other eligibility requirements of the Code.  Any
          Award Agreement relating to Incentive Stock Options will contain

<PAGE>
          or shall be deemed to contain such other terms and conditions as
          from time to time are required in order that the Option be an
          "incentive stock option" as that term is defined in Section 422
          of the Code.

     2.4.3     ISO Notice of Sale Requirement.  Any Participant who
          exercises an Incentive Stock Option shall give prompt written
          notice to the Corporation of any sale or other transfer of the
          shares of Common Stock acquired on such exercise if the sale or
          other transfer occurs (a) within one year after the exercise date
          of the Option, or (b) two years after the grant date of the
          Option.

2.5  Limits on 10% Holders.  No Option may be granted to any
     person who, at the time the Option is granted, owns (or is deemed
     to own under Section 424(d) of the Code) shares of outstanding
     stock of the Corporation (or a parent or subsidiary of the
     Corporation) possessing more than 10% of the total combined
     voting power of all classes of stock of the Corporation (or a
     parent or subsidiary of the Corporation), unless the exercise
     price of such Option is at least 110% of the Fair Market Value of
     the stock subject to the Option and, in the case of an Incentive
     Stock Option grated to such a person, such Option by its terms is
     not exercisable after the expiration of five years from the date
     such Option is granted.

2.6  Effects of Termination of Employment; Termination of
     Subsidiary Status; Discretionary Provisions.

     2.6.1     Dismissal for Cause.  Unless otherwise provided in the
          Award Agreement and subject to earlier termination pursuant to or
          as contemplated by Section 2.2.2 or 4.2, if a Participant's
          employment by or service to the Company is terminated by the
          Company for Cause, the Participant's Option will terminate on the
          Participant's Severance Date, whether or not the Option is then
          vested and/or exercisable.

     2.6.2     Resignation.  Unless otherwise provided in the Award
          Agreement (consistent with applicable securities laws) and
          subject to earlier termination pursuant to or as contemplated by
          Section 2.2.2 or 4.2, if a Participant voluntarily terminates his
          or her employment by or service to the Company (other than
          because of his or her Total Disability or Retirement):

          (a)  the Participant will have until the date that is 30 days
               after the Participant's Severance Date to exercise his or her
               Option (or portion thereof) to the extent that it was vested and
               exercisable on the Severance Date;

          (b)  the Option, to the extent not vested and exercisable on the
               Participant's Severance Date, shall terminate on the Severance
               Date; and

          (c)  the Option, to the extent exercisable for the 30-day period
               following the Participant's Severance Date and not exercised
               during such period, shall terminate at the close of business on
               the last day of the 30-day period.

<PAGE>
     2.6.3     Layoff or Other Involuntary Termination.  Unless
          otherwise provided in the Award Agreement (consistent with
          applicable securities laws) and subject to earlier termination
          pursuant to or as contemplated by Section 2.2.2 or 4.2, if a
          Participant is laid off or the Participant's employment by or
          service to the Company is otherwise terminated at the will of the
          Company (other than in circumstances constituting a termination
          because of death, Total Disability, Retirement, or a termination
          by the Company for Cause):

          (a)  the Participant will have until the date that is three (3)
               months after the Participant's Severance Date to exercise his or
               her Option (or portion thereof) to the extent that it was vested
               and exercisable on the Severance Date;

          (b)  the Option, to the extent not vested and exercisable on the
               Participant's Severance Date, shall terminate on the Severance
               Date; and
          (c)  the Option, to the extent exercisable for the 3-month period
               following the Participant's Severance Date and not exercised
               during such period, shall terminate at the close of business on
               the last day of the 3-month period.
     2.6.4     Death, Disability, or Retirement.  Unless otherwise
          provided in the Award Agreement (consistent with applicable
          securities laws) and subject to earlier termination pursuant to
          or as contemplated by Section 2.2.2 or 4.2, if a Participant's
          employment by or service to the Company terminates as a result of
          the Participant's Total Disability, death, or Retirement:

          (a)  the Participant (or his or her Personal Representative or
               Beneficiary, in the case of the Participant's Total Disability or
               death, respectively), will have until the date that is 12 months
               after the Participant's Severance Date to exercise the
               Participant's Option (or portion thereof) to the extent that it
               was vested and exercisable on the Severance Date;

          (b)  the Option, to the extent not vested and exercisable on the
               Participant's Severance Date, shall terminate on the Severance
               Date; and
          (c)  the Option, to the extent exercisable for the 12-month
               period following the Participant's Severance Date and not
               exercised during such period, shall terminate at the close of
               business on the last day of the 12-month period.
     2.6.5     Events Not Deemed a Termination of Employment.  Unless
          Company policy or the Committee otherwise provides, a
          Participant's employment or service relationship with the Company
          shall not be considered terminated solely due to any sick leave,
          military leave, or any other leave of absence authorized by the
          Company or the Committee; provided that, unless reemployment upon
          the expiration of such leave is guaranteed by contract or law,
          such leave is for a period of not more than 90 days.  In the case
          of any Eligible Person on an approved leave of absence, continued
          vesting of the Award while on leave from the employ of or service
          with the Company may be suspended until the

<PAGE>
          employees returns to
          service, unless the Committee otherwise provides or applicable
          law otherwise requires.  In no event shall an Award be exercised
          after the expiration of the term of the Award set forth in the
          Award Agreement.

     2.6.6     Effect of Change of Subsidiary Status.  For purposes of
          this Plan and any Award, if an entity ceases to be a Subsidiary,
          a termination of employment or service will be deemed to have
          occurred with respect to each Eligible Person in respect of such
          Subsidiary who does not continue as an Eligible Person in respect
          of another entity within the Company.

     2.6.7     Committee Discretion.  Notwithstanding the foregoing
          provisions of this Section 2.6, in the event of, or in
          anticipation of, a termination of employment or service with the
          Company for any reason, other than a discharge for Cause, the
          Committee may accelerate the vesting and exercisability of all or
          a portion of the Participant's Award, and/or, subject to the
          provisions of Sections 2.2.2 and 4.2, extend the exercisability
          period of the Participant's Option upon such terms as the
          Committee determines and as expressly set forth in or by
          amendment to the Award Agreement.

     2.6.8     Determination of Severance Date.  Notwithstanding the
          definition of "Severance Date," the Committee may authorize by
          express provision in or pursuant to an Award an extension of the
          date of termination of the Participant's employment by or
          services to the Company if the Participant's status after grant
          of the Award changes from one category of Eligible Person to
          another (for example, employee to consultant or visa versa), or
          in other circumstances that the Committee deems appropriate).

     2.6.9     Termination of Consulting or Affiliate Services.  If
          the Participant is not an Eligible Employee or a director of the
          Corporation, and provides services as an Other Eligible Person,
          the Committee shall be the sole judge of whether the Participant
          continues to render services to the Company, unless a written
          contract or the Award Agreement otherwise provides.  If, in these
          circumstances, the Company notifies the Participant in writing
          that a termination of the Participant's services to the Company
          has occurred for purposes of this Plan, then (unless the contract
          or the Award Agreement otherwise expressly provides), the
          Participant's termination of services with the Company for
          purposes of this Plan shall be the date which is 10 days after
          the Company's mailing of the notice or, in the case of a
          termination for Cause, the date of the mailing of the notice.

2.7  Option Repricing/Cancellation and Regrant/Waiver of
     Restrictions.  Subject to Section 1.4 and Section 4.5 and the
     specific limitations on Options contained in this Plan, the
     Committee from time to time may authorize, generally or in
     specific cases only, for the benefit of any Eligible Person, any
     adjustment in the exercise price, the vesting schedule, the
     number of shares subject to, or the term of, an Option granted
     under this Plan by cancellation of an outstanding Option and a
     subsequent regranting of the Option, by amendment, by
     substitution of an outstanding Option, by waiver or by other
     legally valid means.  Such amendment or other action may result
     in, among other changes, an

<PAGE>
     exercise price that is higher or
     lower than the exercise price of the original or prior Option,
     provide for a greater or lesser number of shares of Common Stock
     subject to the Option, or provide for a longer or shorter vesting
     or exercise period.

2.8  Options in Substitution for Stock Options Granted by Other
     Corporations.  Options may be granted to Eligible Persons under
     this Plan in substitution for employee stock options granted by
     other entities, in connection with a distribution, merger or
     reorganization by or with the granting entity or an affiliated
     entity, or the acquisition by the Company, directly or
     indirectly, of all or a substantial part of the stock or assets
     of the employing entity.

3.   Restricted Stock Awards.

3.1  Grants.  The Committee may grant one or more Restricted
     Stock Awards to any Eligible Person.  Subject to the provisions
     of this Plan, the Committee will determine the number of shares
     of Common Stock subject to each Restricted Stock Award.  Each
     Restricted Stock Award will be evidenced by an Award Agreement
     signed by the Corporation and, to the extent required by the
     Committee, by the Participant and the Participant's spouse.  Upon
     issuance of the Restricted Stock Award, the Participant may be
     required to provide such further assurances and documents as the
     Committee may require to enforce the restrictions thereon.

3.2  Award Agreement.  Each Restricted Stock Award Agreement will
     specify the number of shares of Common Stock to be issued to the
     Participant, the date of such issuance, the consideration for
     such shares (but not less than the minimum lawful consideration
     under applicable state law) to be paid by the Participant for the
     shares, the extent (if any) to which and the time (if ever) at
     which the Participant will be entitled to dividends, voting and
     other rights in respect of the shares prior to vesting, and the
     restrictions (which may be based on performance criteria, passage
     of time or other factors or any combination thereof) imposed on
     such shares and the conditions of release or lapse of such
     restrictions.

3.3  Vesting.  The restrictions imposed on the shares of Common
     Stock subject to a Restricted Stock Award will not lapse earlier
     than six months after the Award Date, except to the extent the
     Committee may otherwise provide.  To the extent required to
     satisfy applicable securities laws, the restrictions imposed on
     the shares of Common Stock subject to a Restricted Stock Award
     (other than an Award granted to an officer, director, or
     consultant of the Company, which may include more restrictive
     provisions) shall lapse as to such shares, subject to Section
     3.8, at a rate of at least 20% of the shares subject to the Award
     per year over the five years after the date the Award is granted.

3.4  Term.  Any Restricted Stock Award shall either vest or be
     forfeited not more than 10 years after the date of grant.  Each
     Restricted Stock Award will be subject to earlier termination as
     provided in or pursuant to Section 4.2.  Any payment of cash or
     delivery of stock in payment for a Restricted Stock Award may be
     delayed until a future date if specifically authorized by the
     Committee in writing and by the Participant.

<PAGE>
3.5  Purchase Price.

     3.5.1     Pricing Limits.  Subject to the following provisions of
          this Section 3.5, the Committee will determine the purchase price
          per share of the Common Stock covered by each Restricted Stock
          Award at the time of grant of the Award.  In no case will such
          purchase price be less than the greater of:

          (a)  85% of the Fair Market Value of the Common Stock
               on the date of grant, or at the time the purchase
               is consummated; or

          (b)  100% of the Fair Market Value of the Common Stock
               on the date of grant, or at the time the purchase
               is consummated, in the case of any person who owns
               stock possessing more than 10% of the total
               combined voting power of all classes of stock of
               the Corporation, its parent, or a Subsidiary.

     3.5.2     Payment Provisions.  The Corporation will not be
          obligated to issue certificates evidencing shares of Restricted
          Stock pending the lapse of restrictions ("Restricted Shares')
          unless and until it receives full payment of the purchase price
          therefor and all other conditions to the purchase, as determined
          by the Committee, have been satisfied.  The purchase price of any
          Restricted Shares must be paid in full at the time of the
          purchase in one or a combination of the methods set forth in
          clauses (a) through (e) in Section 2.3.2.

3.6  Stock Certificates; Fractional Shares.  Stock certificates
     evidencing Restricted Shares will bear a legend making
     appropriate reference to the restrictions imposed hereunder and
     will be held by the Corporation or by a third party designated by
     the Committee until the restrictions on such shares have lapsed
     and the shares have vested in accordance with the provisions of
     the Award and Section 3.3 and any related loan has been repaid.
     Fractional share interests will be disregarded, but may be
     accumulated.  The Committee, however, may determine that cash,
     other securities, or other property will be paid or transferred
     in lieu of any fractional share interests.

3.7  Restrictions.

     3.7.1     Pre-Vesting Restraints.  Except as provided in
          Section 3.1, Restricted Shares comprising any Restricted Stock
          Award may not be sold, assigned, transferred, pledged or
          otherwise disposed of or encumbered, either voluntarily or
          involuntarily, until the restrictions on such shares have lapsed
          and the shares have become vested.

     3.7.2     Dividend and Voting Rights.  Unless otherwise provided
          in the applicable Award Agreement, a Participant receiving a
          Restricted Stock Award will be entitled to cash dividend and
          voting rights for all Restricted Shares issued even though they
          are not vested, but such rights will terminate immediately as to
          any Restricted Shares which cease to be eligible for vesting.

     3.7.3     Cash Payments.  The Award Agreement shall specify
          whether and to what extent cash or other property received in
          respect of Restricted Shares must be returned

<PAGE>
          (with or without an
          earnings factor) if the Restricted Shares fail to vest and must
          be returned to the Corporation in accordance with Section 3.8.

3.8  Return to the Corporation.  Unless the Committee otherwise
     expressly provides, Restricted Shares subject to a Participant's
     Restricted Stock Award that remain subject to restrictions at the
     time the Participant's employment by or service to the Company
     terminates, or are subject to other conditions to vesting that
     have not been satisfied by the time specified in the applicable
     Award Agreement, will not vest and will be reacquired by the
     Corporation in such manner and on such terms as the Committee
     provides, which terms shall include return or repayment of the
     lower of the Fair Market Value or the original purchase price of
     the Restricted Shares, without interest, to the Participant to
     the extent not prohibited by law.  The Restricted Stock Award
     shall specify any other terms r conditions of the repurchase if
     the Award fails to vest.

3.9  Other Sections Applicable to Restricted Stock Awards .  The
     provisions of Sections 2.6.5 through 2.6.8 are applicable to
     Restricted Stock Awards as well as Options.

3.10 Waiver of Restrictions.  Subject to Section 1.4 and 4.5 and
     the specific limitations on Restricted Stock Awards contained in
     this Plan, the Committee from time to time may authorize,
     generally or in specific cases only, for the benefit of any
     Eligible Person, any adjustment in the vesting schedule, or the
     restrictions upon or the term of, a Restricted Stock Award
     granted under this Plan by amendment, by substitution of an
     outstanding Restricted Stock Award, by waiver or by other legally
     valid means.

4.   Other Provisions.

4.1  Rights of Eligible Persons, Participants and Beneficiaries.

     4.1.1     Employment Status.  Status as an Eligible Person will
          not be construed as a commitment that any Award will be granted
          under this Plan to an Eligible Person or to Eligible Persons
          generally.

     4.1.2     No Employment/Service Contract.  Nothing contained in
          this Plan (or in any other documents under this Plan or related
          to any Award) shall confer upon any Eligible Employee or other
          Participant any right to continue in the employ or other service
          of the Company, constitute any contract or agreement of
          employment or other service or affect an employee's status as an
          employee at will, nor shall interfere in any way with the right
          of the Company to change such person's compensation or other
          benefits, or to terminate his or her employment or other service,
          with or without cause at any time.  Nothing in this Section
          4.1.2, or in Section 4.2.2 or 4.12, however, is intended to
          adversely affect any express independent right of such person
          under a separate employment or service contract.  An Award
          Agreement shall not constitute a contract of employment or
          service.

     4.1.3     Plan Not Funded.  Awards payable under this Plan will
          be payable in shares of Common Stock or from the general assets
          of the Corporation, and (except as provided in Section 1.4.3) no
          special or separate reserve, fund or deposit will be made to
          assure payment of such Awards.  No Participant, Beneficiary or other

<PAGE>
          person will have any right, title or interest in any fund
          or in any specific asset (including shares of Common Stock) of
          the Company by reason of any Award hereunder.  Neither the
          provisions of this Plan (or of any related documents), nor the
          creation or adoption of this Plan, nor any action taken pursuant
          to the provisions of this Plan will create, or be construed to
          create, a trust of any kind or a fiduciary relationship between
          the Company and any Participant, Beneficiary or other person.  To
          the extent that a Participant, Beneficiary or other person
          acquires a right to receive payment pursuant to any Award
          hereunder, such right will be no greater than the right of any
          unsecured general creditor of the Company.

     4.1.4     Charter Documents.  The Certificate of Incorporation
          and By-Laws of the Corporation, as either of them may lawfully be
          amended from time to time, may provide for additional
          restrictions and limitations with respect to the Common Stock
          (including additional restrictions and limitations on the voting
          or transfer of Common Stock) or priorities, rights and
          preferences as to securities and interests prior in rights to the
          Common Stock.  To the extent that these restrictions and
          limitations are greater than those set forth in this Plan or any
          Award Agreement, such restrictions and limitations shall apply to
          any shares of Common Stock acquired pursuant to the exercise of
          Awards and are incorporated herein by this reference.

4.2  Adjustments; Acceleration.

     4.2.1     Adjustments.  Upon or in contemplation of any
          reclassification, recapitalization, stock split (including a
          stock split in the form of a stock dividend) or reverse stock
          split; any merger, combination, consolidation or other
          reorganization; any split-up; spin-off, or similar extraordinary
          dividend distribution ("spin-off") in respect of the Common Stock
          (whether in the form of securities or property); any exchange of
          Common Stock or other securities of the Corporation, or any
          similar, unusual or extraordinary corporate transaction in
          respect of the Common Stock; or a sale of substantially all the
          assets of the Corporation as an entirety ("asset sale"); then the
          Committee shall, in such manner, to such extent (if any) and at
          such time as it deems appropriate and equitable in the
          circumstances:

          (a)  proportionately adjust any or all of (1) the number of
               shares of Common Stock or the number and type of other securities
               that thereafter may be made the subject of Awards (including the
               specific maxima and numbers of shares set forth elsewhere in this
               Plan), (2) the number, amount and type of shares of Common Stock
               (or other securities or property) subject to any or all
               outstanding Awards, (3) the grant, purchase, or exercise price of
               any or all outstanding Awards, or (4) the securities, cash or
               other property deliverable upon exercise or vesting of any
               outstanding Awards, or

          (b)  make provision for a settlement by a cash payment or for the
               substitution or exchange of any or all outstanding Awards for
               cash, securities or other

<PAGE>
               property (or for other awards) based
               upon the distribution or consideration payable to holders of the
               Common Stock upon or in respect of such event.

          The Committee may adopt such valuation methodologies
          for outstanding Awards as it deems reasonable in the
          event of a cash, securities or other property
          settlement.  In the case of Options, but without
          limitation on other methodologies, the Committee may
          base such settlement solely upon the excess (if any) of
          the amount payable upon or in respect of such event
          over the exercise price of the Option to the extent of
          the then vested and exercisable shares subject to the
          Option.  In the case of Restricted Shares, but without
          limiting other methodologies, the Committee may limit
          the payment to  either (1) the purchase price
          previously paid by the Participant, or (2) the Fair
          Market Value of the shares, or (3) the price to be paid
          in the transaction for unrestricted shares.

          The Committee may make adjustments to and/or accelerate
          the exercisability of Options in a manner that
          disqualifies the Options as Incentive Stock Options
          without the written consent of the Option holders
          affected thereby.

          In any of such events, the Committee may take such
          action prior to such event to the extent that the
          Committee deems the action necessary to permit the
          Participant to realize the benefits intended to be
          conveyed with respect to the underlying shares in the
          same manner as is or will be available to stockholders
          generally.

     4.2.2     Acceleration of Awards Upon Change in Control.  Subject
          to Sections 4.2.3 through 4.2.6, unless prior to a Change in
          Control Event the Committee determines that, upon its occurrence,
          benefits under any or all Awards will not accelerate or
          determines that only certain or limited benefits under any or all
          Awards will be accelerated and the extent to which they will be
          accelerated, and/or establishes a different time in respect of
          such event for such acceleration, then upon (or, as may be
          necessary to effectuate the purposes of this acceleration,
          immediately prior to) the occurrence of a Change in Control
          Event:

          (a)  each Option will become immediately vested and exercisable,
               and

          (b)  Restricted Stock will immediately vest free of restrictions.

          The Committee may override the limitations on
          acceleration in this Section 4.2.2 by express provision
          in the Award Agreement and may accord any Eligible
          Person a right to refuse any acceleration, whether
          pursuant to the Award Agreement or otherwise, in such
          circumstances as the Committee may approve.  Any
          acceleration of Awards will comply with applicable
          legal requirements and, if necessary to accomplish the
          purposes of the acceleration or if the circumstances
          otherwise require, may be deemed by the Committee to
          occur (subject to Sections 4.2.4 through 4.2.6) not
          more than 30 days before or only upon the consummation
          of the event.  Any acceleration of an Incentive Stock
          Option may disqualify the Option as an Incentive Stock
          Option and does not require the written consent of the
          holder of the Option, whether or not the holder is
          adversely affected thereby.

<PAGE>
     4.2.3     Possible Early Termination of Accelerated Awards.
          Without any limitation on the Committee's authority under Section
          4.2.1, if the vesting of any Option under this Plan has been
          fully accelerated as required or permitted by Section 4.2.2 but
          is not exercised prior to (a) a dissolution of the Corporation,
          (b) an event described in Section 4.2.1 that the Corporation does
          not survive, or (c) the consummation of a Change in Control Event
          approved by the Board, the Option shall terminate, subject to any
          provision that has been expressly made by the Board or the
          Committee for the survival, substitution, assumption, exchange or
          other settlement of the Option.

     4.2.4     Possible Rescission of Acceleration.  If the vesting of
          an Award has been accelerated in anticipation of an event or upon
          stockholder approval of an event and the Committee or the Board
          later determines that the event will not occur, the Committee may
          rescind the effect of the acceleration as to any then outstanding
          and unexercised or otherwise unvested Awards.

     4.2.5     Pooling Exception. Any discretion with respect to the
          events addressed in this Section 4.2, including any acceleration
          of vesting, shall be limited to the extent required by applicable
          accounting requirements in the case of a transaction intended to
          be accounted for as a pooling of interests transaction.

     4.2.6     Golden Parachute Limitations.  Unless otherwise
          specified in an Award Agreement or otherwise authorized by the
          Board in the specific case, no vesting of or lapse or
          restrictions imposed on an Award will be accelerated under this
          Plan to an extent or in a manner that would result in payments
          that are not fully deductible by the Company for federal income
          tax purposes because of Section 280G of the Code.  If a
          Participant would be entitled to benefits or payments hereunder
          and under any other plan or program that would constitute
          "parachute payments" as defined in Section 280G of the Code, then
          the Participant may by written notice to the Company designate
          the order in which such parachute payments will be reduced or
          modified so that the Company is not denied any federal income tax
          deductions for any "parachute payments" because of Section 280G
          of the Code.

4.3  Compliance with Laws.

     4.3.1     General.  This Plan, the granting and vesting of Awards
          under this Plan, and the offer, issuance and delivery of shares
          of Common Stock, the acceptance of promissory notes and/or the
          payment of money under this Plan or under Awards are subject to
          compliance with all applicable federal and state laws, rules and
          regulations (including but not limited to state and federal
          securities laws, and federal margin requirements) and to such
          approvals by any listing, regulatory or governmental authority as
          may, in the opinion of counsel for the Corporation, be necessary
          or advisable in connection therewith.  In addition, any
          securities delivered under this Plan may be subject to any
          special restrictions that the Committee may require to preserve a
          pooling of interests under generally accepted accounting
          principles.  The person acquiring any securities under this

<PAGE>
          Plan will, if requested by the Corporation, provide such assurances
          and representations to the Corporation as the Committee may deem
          necessary or desirable to assure compliance with all applicable
          legal and accounting requirements.

     4.3.2     Compliance with Securities Laws.  No Participant shall
          sell, pledge or otherwise transfer shares of Common Stock
          acquired pursuant to an Award or any interest in such shares
          except in accordance with the express terms of this Plan and the
          applicable Award Agreement.  Any attempted transfer in violation
          of this Section 4.3 shall be void and of no effect.  Without in
          any way limiting the provisions set forth above, no Participant
          shall make any disposition of all or any portion of shares of
          Common Stock acquired or to be acquired pursuant to an Award,
          except in compliance with all applicable federal and state
          securities laws and unless and until:

          (a)  there is then in effect a registration statement under the
               Securities Act covering such proposed disposition and such
               disposition is made in accordance with such registration
               statement; or

          (b)  such disposition is made in accordance with Rule 144 under
               the Securities Act; or

          (c)  such Participant notifies the Corporation of the proposed
               disposition and furnishes the Corporation with a statement of the
               circumstances surrounding the proposed disposition, and, if
               requested by the Corporation, furnishes to the Corporation an
               opinion of counsel acceptable to the Corporation's counsel, that
               such disposition will not require registration under the
               Securities Act and will be in compliance with all applicable
               state securities laws.

          Notwithstanding anything else herein to the contrary,
          the Company has no obligation to register the Common
          Stock or file any registration statement under either
          federal or state securities laws, nor does the Company
          make any representation concerning the likelihood of a
          public offering of the Common Stock or any other
          securities of the Company.

     4.3.3     Share Legends .  All certificates evidencing shares of
          Common Stock issued or delivered under this Plan shall bear the
          following legends and/or any other appropriate or required
          legends under applicable laws:

          "OWNERSHIP OF THIS CERTIFICATE, THE SHARES EVIDENCED BY
          THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT
          TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
          APPLICABLE LAW AND UNDER AGREEMENTS WITH THE
          CORPORATION, INCLUDING RESTRICTIONS ON SALE,
          ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION."

<PAGE>
          "THE SHARES ARE SUBJECT TO THE CORPORATION'S RIGHT OF
          FIRST REFUSAL AND CALL RIGHTS TO REPURCHASE THE SHARES
          UNDER THE CORPORATION'S STOCK INCENTIVE PLAN AND
          AGREEMENTS WITH THE CORPORATION THEREUNDER, COPIES OF
          WHICH ARE AVAILABLE FOR REVIEW AT THE OFFICE OF THE
          SECRETARY OF THE CORPORATION."

          "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
          REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED ("ACT"), NOR HAVE THEY BEEN REGISTERED
          OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
          NO TRANSFER OF SUCH SECURITIES WILL BE PERMITTED UNLESS
          A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS
          TO SUCH TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE
          WITH RULE 144 UNDER THE ACT, OR IN THE OPINION OF
          COUNSEL TO THE CORPORATION, REGISTRATION UNDER THE ACT
          IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY
          WITH THE ACT AND WITH APPLICABLE STATE SECURITIES
          LAWS."

     4.3.4     Delivery of Financial Statements.  The Corporation
          shall deliver annually to Participants such financial statements
          of the Corporation as are required to satisfy applicable
          securities laws.

     4.3.5     Confidential Information.  Any financial or other
          information relating to the Corporation obtained by Participants
          in connection with or as a result of this Plan or their Awards
          shall be treated as confidential.

4.4  Tax Withholding.

     4.4.1     Tax Withholding.  Upon any exercise, vesting, or
          payment of any Award or upon the disposition of shares of Common
          Stock acquired pursuant to the exercise of an Incentive Stock
          Option prior to satisfaction of the holding period requirements
          of Section 422 of the Code, the Company shall have the right at
          its option to:

          (a)  require the Participant (or Personal Representative or
               Beneficiary, as the case may be) to pay or provide for payment of
               the amount of any taxes which the Company may be required to
               withhold with respect to such Award event or payment;

          (b)  deduct from any amount payable to the Participant (or
               Personal Representative or Beneficiary, as the case may be) in
               cash or equivalent (in respect of an Award or otherwise) the
               amount of any taxes which the Company may be required to withhold
               with respect to such Award event or payment; or

          (c)  reduce the number of shares of Common Stock to be delivered
               by (or otherwise reacquire shares held by the Participant at
               least 6 months) the

<PAGE>
               appropriate number of shares of Common Stock,
               valued at their then Fair Market Value, to satisfy the minimum
               withholding obligation.

          The Committee may, in its sole discretion (subject to
          Section 4.3), grant (either at the time of grant of the
          Award or thereafter) to the Participant the right to
          elect, pursuant to such rules and subject to such
          conditions as the Committee may establish, to have the
          Corporation utilize the withholding offset under clause
          (c) above.

          In no event will the value of shares withheld under (c)
          above exceed the minimum amount of required withholding
          under applicable law.

     4.4.2     Tax Loans.  If so provided in the Award Agreement or
          otherwise authorized by the Committee, the Corporation may, to
          the extent permitted by law, authorize a loan to an Eligible
          Person in the amount of any taxes that the Company may be
          required to withhold with respect to shares of Common Stock
          received (or disposed of, as the case may be) pursuant to a
          transaction described in Section 4.4.1.  Such a loan will be for
          a term not greater than 12 months and at a rate of interest and
          pursuant to such other terms and conditions as the Corporation
          may establish, subject to compliance with applicable law.  Such a
          loan need not otherwise comply with the provisions of Section
          2.3.3.

4.5  Plan and Award Amendments, Termination and Suspension.

     4.5.1     Board Authorization.  The Board may, at any time,
          terminate or, from time to time, amend, modify or suspend this
          Plan, in whole or in part.  No Awards may be granted during any
          suspension of this Plan or after termination of this Plan.
          Unless otherwise expressly provided in this Plan or in an
          applicable Award Agreement, any Award granted prior to the
          termination or suspension of this Plan may extend beyond the date
          of such termination or suspension, and all authority of the
          Committee with respect to Awards hereunder, including the
          authority to amend an Award, will continue during any suspension
          of this Plan and in respect of Awards outstanding upon or
          following the termination of this Plan.

     4.5.2     Stockholder Approval.  This Plan and any amendment to
          this Plan shall be subject to stockholder approval to the extent
          then required under Section 422 or 424 of the Code or any other
          applicable law, or deemed necessary or advisable by the Board.

     4.5.3     Amendments to Awards.  Without limiting any other
          express authority of the Committee under but subject to the
          express limits of this Plan, the Committee by resolution or
          otherwise may make changes to the terms and conditions of Awards
          and the Plan.

     4.5.4     Limitations on Amendments to Plan and Awards.  The
          Board and the Committee may not, without the written consent of
          the Participant affected thereby, amend, terminate or suspend
          this Plan in any manner materially adverse to the Participant's
          rights or benefits under an outstanding Award or amend the

<PAGE>
          Participant's Award in any manner materially adverse to the
          Participant's rights or benefits thereunder.  Changes
          contemplated by Section 4.2 or Section 4.5.5 do not and will not
          be deemed to constitute changes or amendments for purposes of
          this Section 4.5.

4.6  Privileges of Stock Ownership.  Except as otherwise
     expressly authorized by the Committee or this Plan or in the
     Award Agreement, a Participant will not be entitled to any
     privilege of stock ownership as to any shares of Common Stock not
     actually delivered to and held of record by the Participant.  No
     adjustment will be made for dividends or other rights as a
     stockholder for which a record date is prior to such date of
     delivery.

4.7  Effective Date of the Plan.  This Plan is effective upon the
     date of its approval by the Board (the "Effective Date"), subject
     to approval by the stockholders of the Corporation within twelve
     months after the date of Board approval.

4.8  Term of the Plan.  Unless earlier terminated by the Board,
     this Plan will terminate at the close of business on the day
     before the 10th anniversary of the Effective Date.

4.9  Governing Law/Severability.

     4.9.1     Choice of Law.  This Plan, the Awards, all documents
          evidencing Awards and all other related documents will be
          governed by, and construed in accordance with, the laws of the
          state of Delaware.

     4.9.2     Severability.  If it is determined that any provision
          of this Plan or an Award Agreement is invalid and unenforceable,
          the remaining provisions of this Plan and/or the Award Agreement,
          as applicable, will continue in effect provided that the
          essential economic terms of this Plan and the Award can still be
          enforced.

4.10 Captions.  Captions and headings are given to the sections
     and subsections of this Plan solely as a convenience to
     facilitate reference.  Such headings will not be deemed in any
     way material or relevant to the construction or interpretation of
     this Plan or any provision thereof.

4.11 Non-Exclusivity of Plan.  Nothing in this Plan will limit or
     be deemed to limit the authority of the Board or the Committee to
     grant awards or authorize any other compensation, with or without
     reference to the Common Stock, under any other plan or authority.

4.12 No Restriction on Corporate Powers.  The existence of the
     Plan, the Award Agreements, and the Awards granted hereunder,
     shall not limit, affect or restrict in any way the right or power
     of the Board or the stockholders of the Corporation to make or
     authorize: (a) any adjustment, recapitalization, reorganization
     or other change in the Corporation's or any Subsidiary's capital
     structure or its business; (b) any merger, amalgamation,
     consolidation or change in the ownership of the Corporation or
     any Subsidiary; (c) any issue of bonds, debentures, capital,
     preferred or prior preference stocks ahead of or affecting the
     Corporation's capital stock or the rights thereof; (d) any

<PAGE>
     dissolution or liquidation of the Corporation or any Subsidiary;
     (e) any sale or transfer of all or any part of the Corporation or
     any Subsidiary's assets or business; or (f) any other corporate
     act or proceeding by the Corporation or any Subsidiary.  No
     Participant, Beneficiary or any other person shall have any claim
     under any Award or Award Agreement against any member of the
     Board or the Committee, or the Corporation or any employees,
     officers or agents of the Corporation or any Subsidiary, as a
     result of any such action.

4.13 Other Company Compensation or Benefit Programs .  Payments
     and other benefits received by a Participant under an Award made
     pursuant to this Plan shall not be deemed a part of a
     Participant's compensation for purposes of the determination of
     benefits under any other employee welfare or benefit plans or
     arrangements, if any, provided by the Corporation or any
     Subsidiary, except where the Committee or the Board expressly
     otherwise provides or authorizes in writing.  Awards under this
     Plan may be made in addition to, in combination with, as
     alternatives to or in payment of grants, awards or commitments
     under any other plans or arrangements of the Corporation or any
     Subsidiary.

5.   Definitions.

"Award" means an award of any Option or Restricted Stock, or any
combination thereof, whether alternative or cumulative,
authorized by and granted under this Plan.

"Award Agreement" means any writing, approved by the Committee,
setting forth the terms of an Award that has been duly authorized
and approved.

"Award Date" means the date upon which the Committee took the
action granting an Award or such later date as the Committee
designates as the Award Date at the time of the grant of the
Award.

"Beneficiary" means the person, persons, trust or trusts
designated by a Participant, or, in the absence of a designation,
entitled by will or the laws of descent and distribution, to
receive the benefits specified in the Award Agreement and under
this Plan if the Participant dies, and means the Participant's
executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.

"Board" means the Board of Directors of the Corporation.

"Cause" with respect to a Participant means (unless otherwise
expressly provided in the applicable Award Agreement, or another
applicable contract with the Participant that defines such term
for purposes of determining the effect that a "for cause"
termination has on the Participant's stock options and/or
restricted stock awards) a termination of employment or service
based upon a finding by the Company, acting in good faith and
based on its reasonable belief at the time, that the Participant:

     (a)  has been negligent in the discharge of his or her duties to
          the Company, has refused to perform stated or assigned duties or
          is incompetent in or (other than by

<PAGE>
          reason of a disability or
          analogous condition) incapable of performing those duties; or

     (b)  has been dishonest or committed or engaged in an act of
          theft, embezzlement or fraud, a breach of confidentiality, an
          unauthorized disclosure or use of inside information, customer
          lists, trade secrets or other confidential information; or

     (c)  has breached a fiduciary duty, or willfully and materially
          violated any other duty, law, rule, regulation or policy of the
          Company or an affiliate; or has been convicted of, or plead
          guilty or nolo contendere to, a felony or misdemeanor (other than
          minor traffic violations or similar offenses); or

     (d)  has materially breached any of the provisions of any
          agreement with the Company or an affiliated entity; or

     (e)  has engaged in unfair competition with, or otherwise acted
          intentionally in a manner injurious to the reputation, business
          or assets of, the Company or an affiliate; or

     (f)  has improperly induced a vendor or customer to break or
          terminate any contract with the Company or an affiliate or
          induced a principal for whom the Company or an affiliate acts as
          agent to terminate such agency relationship.

A termination for Cause shall be deemed to occur (subject to
reinstatement upon a contrary final determination by the
Committee) on the date on which the Company first delivers
written notice to the Participant of a finding of termination for
Cause.

"Change in Control Event" means any of the following:

     (a)  Approval by the Board and by stockholders of the Corporation
          (or, if no stockholder approval is required, by the Board alone)
          of the dissolution or liquidation of the Corporation, other than
          in the context of a transaction that does not constitute a Change
          in Control Event under clause (b) below;

     (b)  Consummation of a merger, consolidation, or other
          reorganization, with or into, or the sale of all or substantially
          all of the Corporation's business and/or assets as an entirety
          to, one or more entities that are not Subsidiaries or other
          affiliates of the Company (a "Business Combination"), unless (1)
          as a result of the Business Combination, more than 50% of the
          outstanding voting power generally in the election of directors
          of the surviving or resulting entity or a parent thereof  (the
          "Successor Entity") immediately after the reorganization are, or
          will be, owned, directly or indirectly, by holders of the
          Corporation's voting securities immediately before the Business
          Combination; and (2) no "person" (as such term is used in
          Sections 13(d) and 14(d) of the Exchange Act), excluding the
          Successor Entity or an Excluded Person, beneficially owns,
          directly or indirectly, more than 50% of the outstanding shares
          or the combined voting power of the outstanding voting securities
          of the Successor Entity, after giving effect to the Business

<PAGE>
          Combination, except to the extent that such ownership existed
          prior to the Business Combination; or

     (c)  Any "person" (as such term is used in Sections 13(d) and
          14(d) of the Exchange Act) other than an Excluded Person becomes
          the beneficial owner (as defined in Rule 13d-3 under the Exchange
          Act), directly or indirectly, of securities of the Corporation
          representing more than 50% of the combined voting power of the
          Corporation's then outstanding securities entitled to then vote
          generally in the election of directors of the Corporation, other
          than as a result of (1) an acquisition directly from the Company,
          (2) an acquisition by the Company, or (3) an acquisition by an
          entity pursuant to a transaction which is expressly excluded
          under clause (b) above.

"Code"  means the Internal Revenue Code of 1986, as amended  from
time to time.

"Commission" means the Securities and Exchange Commission.

"Committee" means the Board or one or more committees of
director(s) appointed by the Board to administer all or certain
aspects of this Plan, each committee to be comprised solely of
one or more directors or such greater number of directors as may
be required under applicable law.

"Common Stock" means the shares of the Corporation's Common
Stock, $0.001 par value, and such other securities or property as
may become the subject of Awards, or become subject to Awards,
pursuant to an adjustment made under Section 4.2 of this Plan.

"Company" means the Corporation and its Subsidiaries.

"Corporation"   means  MindArrow  Systems,   Inc.,   a   Delaware
corporation, and its successors.

"Eligible Employee" means an officer (whether or not a director)
or employee of the Company.

"Eligible Person" means an Eligible Employee, or any Other
Eligible Person, designated by the Committee in its discretion.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

"Excluded Person" means (a) any person described in and
satisfying the conditions of Rule 13d-1(b)(1) under the Exchange
Act, (b) the Company, (c) an employee benefit plan (or related
trust) sponsored or maintained by the Company or the Successor
Entity, or (d) any person who is the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act) of more than 25% of the
Common Stock on the Effective Date (or an affiliate, successor,
heir, descendant, or related party of or to such person).

"Fair Market Value" on any date means:

     (a)  if the stock is listed or admitted to trade on a
          national securities exchange, the closing price of the
          stock on the Composite Tape, as published in the
          Western Edition of The Wall Street Journal, of the
          principal national securities exchange

<PAGE>
          on which the
          stock is so listed or admitted to trade, on such date,
          or, if there is no trading of the stock on such date,
          then the closing price of the stock as quoted on such
          Composite Tape on the next preceding date on which
          there was trading in such shares;

     (b)       if the stock is not listed or admitted to trade on
          a national securities exchange, the last/closing price
          for the stock on such date, as furnished by the
          National Association of Securities Dealers, Inc.
          ("NASD") through the NASDAQ National Market Reporting
          System or a similar organization if the NASD is no
          longer reporting such information;

     (c)  if the stock is not listed or admitted to trade on a
          national securities exchange and is not reported on the
          National Market Reporting System, the mean between the
          bid and asked price for the stock on such date, as
          furnished by the NASD or a similar organization; or

     (d)  if the stock is not listed or admitted to trade on a
          national securities exchange, is not reported on the
          National Market Reporting System and if bid and asked
          prices for the stock are not furnished by the NASD or a
          similar organization, the value as established by the
          Committee at such time for purposes of this Plan.

     Any determination as to fair market value made pursuant to
     this Plan shall be determined without regard to any
     restriction other than a restriction which, by its terms,
     will never lapse, and shall be conclusive and binding on all
     persons.

"Incentive Stock Option" means an Option that is designated and
intended as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such
provisions (including but not limited to the receipt of
stockholder approval of this Plan, if the award is made prior to
such approval) and is made under such circumstances and to such
persons as may be necessary to comply with that section.

"Nonqualified Stock Option" means an Option that is not an
incentive stock option within the meaning of Section 442 of the
code and includes an Option designated as a Nonqualified Stock
Option and any Option intended as an Incentive Stock Option that
fails to meet the applicable legal requirements thereof.

"Option" means an option to purchase Common Stock granted under
this Plan.  The Committee will designate any Option granted to an
employee of the Corporation or a Subsidiary as a Nonqualified
Stock Option or an Incentive Stock Option.

"Other Eligible Person" means any director of, or any individual
consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the offering or
sale of securities of the Company in a capital raising
transaction or as a market maker or promoter of the Company's
securities) to, the Company, and who is selected to participate
in this Plan by the Committee.  An advisor or consultant may be
selected as an Other Eligible Person only if such person's
participation in this Plan would not adversely affect (a) the
Corporation's eligibility to rely on the Rule 701 from
registration under the Securities Act for the offering of

<PAGE>
shares issuable under this Plan by the Company, or (b) the Corporation's
compliance with any other applicable laws.

"Participant" means an Eligible Person who has been granted and
holds an Award under this Plan.

"Personal Representative" means the person or persons who, upon
the disability or incompetence of a Participant, has acquired on
behalf of the Participant, by legal proceeding or otherwise, the
power to exercise the rights or receive benefits under this Plan
by virtue of having become the legal representative of the
Participant.

"Plan" means this MindArrow Systems, Inc. 2000 Stock Incentive
Plan, as it may hereafter be amended from time to time.

"Public Offering Date" means the date the Common Stock is first
registered under the Exchange Act and listed or quoted on a
recognized national securities exchange or in the NASDAQ National
Market Quotation System.

"Restricted Shares" or "Restricted Stock" means shares of Common
Stock awarded to a Participant under this Plan, subject to
payment of such consideration and such conditions on vesting
(which may include, among others, the passage of time, specified
performance objectives or other factors) and such transfer and
other restrictions as are established in or pursuant to this Plan
and the related Award Agreement, to the extent such remain
unvested and restricted under the terms of the applicable Award
Agreement.

"Retirement" means retirement with the consent of the Company or,
from active service as an employee or officer of the Company on
or after attaining (a) age 55 with ten or more years of
employment with the Company, or (b) age 65.

"Securities Act" means the Securities Act of 1933, as amended
from time to time.

"Severance Date" means (a) in the case of an Award granted to an
Eligible Employee, the date the Eligible Employee's employment by
the Company terminates for any reason whatsoever, (b) in the case
of an Award granted to an Other Eligible Person who is a director
of the Corporation, the date the director ceases to be a director
of the Corporation for any reason whatsoever, or (c) in the case
of any other Other Eligible Person, the date the person's
services to the Company terminate for any reason whatsoever.

"Severance Date" means the date the Participant's employment by
or services to the Company terminate (for any reason whatsoever).

"Subsidiary" means any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially
owned, directly or indirectly, by the Corporation.

"Total Disability" means a "total and permanent disability"
within the meaning of Section 22(e)(3) of the Code and, with
respect to Awards other than Incentive Stock Options, such other
disabilities, infirmities, afflictions, or conditions as the
Committee may include.

<PAGE>

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