Document:

<PAGE>

                                                                Exhibit 10.5

                                LIGHTBRIDGE, INC.

                               1998 NON-STATUTORY
                                STOCK OPTION PLAN

SECTION 1. PURPOSE

      This 1998 Non-Statutory Stock Option Plan (the "Plan") is intended as a
performance incentive for officers and employees of Lightbridge, Inc., a
Delaware corporation (the "Company"), or its Subsidiaries (as hereinafter
defined) and for certain other individuals providing services to or acting as
directors of the Company or its Subsidiaries, to enable the persons to whom
options are granted (an "Optionee" or "Optionees") to acquire or increase a
proprietary interest in the Company and its success. The Company intends that
this purpose will be effected by the granting of stock options ("Options") under
the Plan. The term "Subsidiaries" means any corporations in which stock
possessing 50% or more of the total combined voting power of all classes of
stock of such corporation or corporations is owned directly or indirectly by the
Company.

SECTION 2. ADMINISTRATION

      2.1. ADMINISTRATION. This Plan shall be administered by the Compensation
Committee or any other committee of the Board of Directors of the Company (the
"Board"), consisting of two or more "Outside Directors" (such committee may
hereinafter be referred to as the "Plan Administrator"). As used herein, the
term "Outside Director" means any director who: (i) is not an employee of the
Company or of any "affiliated group" (as such term is defined in Section 1504(a)
of the Code) which includes the Company (an "Affiliate"); (ii) is not a former
employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company's or any Affiliate's taxable year; (iii) has not been an officer of the
Company or any Affiliate; and (iv) does not receive remuneration from the
Company or any Affiliate, either directly or indirectly, in any capacity other
than as a director.

      Except as specifically reserved to the Board under the terms of the Plan,
the Plan Administrator shall have full and final authority to operate, manage
and administer the Plan on behalf of the Company. This authority includes, but
is not limited to: (i) the power to grant Options conditionally or
unconditionally; (ii) the power to prescribe the form or forms of the
instruments evidencing Options granted under this Plan; (iii) the power to
interpret the Plan; (iv) the power to provide regulations for the operation of
the incentive features of the Plan, and otherwise to prescribe regulations for
interpretation, management and administration of the Plan; (v) the power to
delegate to other persons the responsibility for performing ministerial acts in
furtherance of the Plan's purpose; (vi) the power to make, in its sole
discretion, changes to any outstanding Option granted under the Plan, including
the power to reduce the exercise price, to accelerate the vesting schedule, or
to extend the expiration date; and (vii) the power

<PAGE>

to engage the services of persons or organizations in furtherance of the Plan's
purpose, including but not limited to banks, insurance companies, brokerage
firms and consultants.

      In addition, as to each Option, the Plan Administrator shall have full and
final authority, in its sole discretion: (i) to determine the number of shares
subject to each Option; (ii) to determine the time or times at which Options
will be granted; (iii) to determine the conditions on which Options will be
granted or may be exercised; (iv) to determine the Option price for the shares
subject to each Option, which price shall be subject to the applicable
requirements, if any, of Section 5.1(c) hereof; and (v) to determine the time or
times when each Option shall become exercisable and the duration of the exercise
period, which shall not exceed the limitations specified in Section 5.1(a).

      No member of the committee serving as Plan Administrator shall be liable
for any action or determination made in good faith with respect to the Plan or
any Option granted thereunder.

      2.2. APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may, from time to
time, appoint members of the committee serving as Plan Administrator in
substitution for, or in addition to, members previously appointed and may fill
vacancies, however caused, in such committee; provided, however, that each such
appointee will be an Outside Director, as described in Section 2.1. The
committee serving as Plan Administrator shall hold its meetings at such times
and places as it shall deem advisable. A majority of its members shall
constitute a quorum, and all actions of such committee shall require the
affirmative vote of a majority of its members. Any action may be taken by a
written instrument signed by all of the members, and any action so taken shall
be as fully effective as if it had been taken by a vote of a majority of the
members at a meeting duly called and held.

      2.3 OPTION GRANTS BY AUTHORIZED OFFICER. Notwithstanding the provisions of
Section 2.1, the Plan Administrator or the Board may authorize the Chief
Executive Officer or another executive officer of the Company (the "Authorized
Officer") to grant options ("Authorized Officer Options") to eligible optionees,
as defined in Section 4.1, who are not officers of the Company or members of the
Board. The Plan Administrator or the Board may, in its action naming the
Authorized Officer, specify other limitations or conditions with respect to
Authorized Officer Options, including without limitation a maximum number of
shares that may be subject to each Authorized Officer Option. In furtherance of
the provisions of this Section 2.3, except to the extent otherwise specified by
action of the Plan Administrator or the Board, the Authorized Officer shall, as
to each Authorized Officer Option, have the authority to make the determinations
specified in the third paragraph of Section 2.1.

SECTION 3. STOCK

      3.1. SHARES SUBJECT TO PLAN. The stock subject to the Options granted
under the Plan shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share ("Common Stock"), or shares of the Company's
Common Stock held in treasury. The total number of shares that may be issued
pursuant to Options granted under the Plan shall not

                                      -2-
<PAGE>

exceed an aggregate of 1,000,000 shares of Common Stock. Such number of shares
shall be subject to adjustment as provided in Section 7 hereof.

      3.2. LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding Option under
the Plan expires, is canceled or is otherwise terminated (other than by
exercise), the shares of Common Stock allocable to the unexercised portion of
such Option shall be restored to the Plan and shall again become available for
the grant of other Options under the Plan.

      3.3. LIMITATION ON GRANTS. In no event may any Plan participant be granted
Options with respect to more than 500,000 shares of Common Stock in any fiscal
year. The number of shares of Common Stock issuable pursuant to an Option
granted to a Plan participant in a fiscal year that is subsequently forfeited,
canceled or otherwise terminated shall continue to count toward the foregoing
limitation in such fiscal year. In addition, if the exercise price of an Option
is subsequently reduced, the transaction shall be deemed a cancellation of the
original Option and the grant of a new one so that both transactions shall count
toward the maximum shares issuable in the fiscal year of each respective
transaction.

SECTION 4. ELIGIBILITY

      4.1. ELIGIBLE OPTIONEES. Options may be granted to officers or other
employees of the Company or its Subsidiaries, to members of the Board or the
board of directors of any Subsidiary whether or not employees of the Company or
such Subsidiary, and to consultants and other individuals providing services to
the Company or its Subsidiaries.

      4.2. OPTION GRANTS TO DIRECTORS. As compensation for services to the
Company, each Director of the Company who is not an employee of the Company (a
"Non-Employee Director") and who is elected to the Board on or after the date of
the adoption of this Plan shall automatically be granted, immediately upon his
or her initial election, an Option (an "Initial Option") to purchase 20,000
shares of Common Stock of the Company, vesting in equal installments on the
first three anniversaries of the date of grant (provided that the Optionee is
then a Director of the Company). In addition, immediately following each annual
meeting of stockholders of the Company or special meeting in lieu thereof, there
shall automatically be granted to each Non-Employee Director reelected at or
remaining in office after such meeting a fully-vested Option to purchase 4,000
shares of Common Stock; PROVIDED that no such automatic grant shall be made to
any Non-Employee Director who at the time of such meeting holds any outstanding
Initial Option (as defined in this Section 4.2 or in Section 4.4 of the
Lightbridge, Inc. 1996 Incentive and Non-Qualified Stock Option Plan) that is
not fully vested, unless at least two annual meetings of stockholders of the
Company or special meetings in lieu thereof have intervened after the year in
which the initial election of such Non-Employee Director occurred and prior to
the meeting following which such automatic grant would occur. Each Option
granted to a Non-Employee Director pursuant to this Section 4.2 shall expire on
the tenth anniversary of the date of grant. The exercise price of each Option
granted pursuant to this Section 4.2 shall be equal to the fair market value of
the Common Stock on the date the Option is granted, such fair market value to be
determined in accordance with the provisions of Section 5.1(c).

                                      -3-
<PAGE>

SECTION 5. TERMS OF THE OPTION AGREEMENTS

      5.1. MANDATORY TERMS. Each option agreement shall contain such provisions
as the Plan Administrator shall from time to time deem appropriate. Option
agreements need not be identical, but each option agreement by appropriate
language shall include the substance of all of the following provisions:

            (a) EXPIRATION. Notwithstanding any other provision of the Plan or
of any option agreement, each Option shall expire on the date specified in the
option agreement, which date shall not be later than the tenth anniversary of
the date on which the Option was granted

            (b) EXERCISE. Each Option shall be exercisable in full or in
installments (which need not be equal) and at such times as designated by the
Plan Administrator. To the extent not exercised, installments shall accumulate
and be exercisable, in whole or in part, at any time after becoming exercisable,
but not later than the date the Option expires.

            (c) PURCHASE PRICE. The price at which shares may be purchased
pursuant to Options shall be specified by the Plan Administrator at the time the
Option is granted, and may be equal to or greater than the fair market value of
the shares of Common Stock on the date such Option is granted, but shall not be
less than the par value of shares of Common Stock. For the purpose of the Plan,
the fair market value of the Common Stock shall be the closing price per share
on the date of grant of the Option as reported by a nationally recognized stock
exchange, or, if the Common Stock is not listed on such an exchange, as reported
by the National Association of Securities Dealers Automated Quotation System,
Inc. ("Nasdaq"), or, if the Common Stock is not quoted on Nasdaq, the fair
market value as determined by the Plan Administrator.

            (d) TRANSFERABILITY OF OPTIONS. Options granted under the Plan and
the rights and privileges conferred thereby may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by applicable laws of descent and distribution, and shall
not be subject to execution, attachment or similar process. Upon any attempt so
to transfer, assign, pledge, hypothecate or otherwise dispose of any Option
under the Plan or any right or privilege conferred hereby, contrary to the
provisions of the Plan, or upon the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, such Option shall
thereupon terminate and become null and void.

            (e) TERMINATION OF EMPLOYMENT OR DISABILITY OR DEATH OF OPTIONEE.
Except as may be otherwise expressly provided in the terms and conditions of the
Option granted to an Optionee:

                    (i) Options granted hereunder shall terminate on the
earliest to occur of:

                          (A)    the date of expiration thereof;

                                      -4-
<PAGE>

                          (B) thirty days after the date of termination of the
Optionee's employment with or performance of services for the Company (other
than as a result of death or permanent and total disability of the Optionee),
including upon the Optionee's retirement; or

                          (C) twelve months after the date of termination of the
Optionee's employment with or performance of services for the Company as a
result of the death or permanent and total disability of an Optionee under the
then established rules of the Company.

                    (ii) In the event of the termination of an Optionee's
employment with or performance of services for the Company by the Company (other
than as a result of death or permanent and total disability of the Optionee) or
upon the Optionee's retirement, the Optionee's Option shall be exercisable
during the thirty-day post-termination period described in Paragraph
5.1(e)(i)(B) to the extent that it was exercisable at the time of such
termination of employment or performance of services. In the event of the
termination of the Optionee's employment with or performance of services for the
Company as a result of the permanent and total disability of an Optionee, the
Optionee's Option shall be exercisable during the twelve-month post-termination
period referred to in Paragraph 5.1(e)(i)(C) to the extent that it was
exercisable at the time of such termination of employment or performance of
services. In the event of the termination of the Optionee's employment with or
performance of services for the Company as a result of the death of the
Optionee, the Optionee's executor, administrator or any person or persons to
whom his Option may be transferred by will or by laws of descent and
distribution shall have the right at any time during the twelve-month
post-termination period referred to in Paragraph 5.1(e)(i)(C) to exercise such
Option, to the extent the Optionee was entitled to exercise such Option at the
time of such termination of employment or performance of services. Should such
termination for reason of permanent disability or death occur after the first
anniversary of the date at which the Optionee was first employed or otherwise
began to serve the Company, then at the Board's discretion, the Option may be
exercised for up to the greater of (A) 50% of all Option shares (and such shares
shall be deemed vested) or (B) the number of shares that had vested as of the
date of such death or such retirement. After the death of the Optionee, his
executors, administrators or any person or persons to whom his Option may be
transferred by will or by the laws of descent and distribution, shall have the
right to exercise the Option.

                    (iii) An employment or consulting relationship between the
Company and the Optionee shall be deemed to exist during any period in which the
Optionee is employed in any capacity by the Company or by any Subsidiary or
providing services to the Company, as the case may be. Whether authorized leave
of absence or absence on military or government service shall constitute
termination of the employment relationship between the Company and the Optionee
shall be determined by the Plan Administrator at the time thereof.

            (f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose
to be the owner of any shares of Common Stock subject to any Option unless and
until (i) the Option shall have been exercised with respect to such shares
pursuant to the terms thereof, and (ii) the Company shall have issued and
delivered a certificate representing such shares. Thereupon,

                                      -5-
<PAGE>

the Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Common Stock.

      5.2. CERTAIN OPTIONAL TERMS. The Plan Administrator may in its discretion
provide, upon the grant of any Option hereunder, that the Company shall have an
option to repurchase all or any number of shares purchased upon exercise of such
Option. The repurchase price per share payable by the Company shall be such
amount or be determined by such formula as is fixed by the Plan Administrator at
the time the Option for the shares subject to repurchase was granted. The Plan
Administrator may also provide that the Company shall have a right of first
refusal with respect to the transfer or proposed transfer of any shares
purchased upon exercise of an Option granted hereunder. In the event the Plan
Administrator shall grant Options subject to the Company's repurchase rights or
rights of first refusal, the certificate or certificates representing the shares
purchased pursuant to the exercise of such Option shall carry a legend
satisfactory to counsel for the Company referring to such rights.

SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

      6.1. NOTICE OF EXERCISE. Any Option granted under the Plan may be
exercised by the Optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the Optionee then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed, accompanied by payment for such shares.

      6.2. MEANS OF PAYMENT AND DELIVERY. Common Stock purchased on exercise of
an Option must be paid for as follows: (a) in cash or by check (acceptable to
the Company in accordance with guidelines established for this purpose), bank
draft or money order payable to the order of the Company, or (b) through the
delivery of shares of Common Stock (which in the case of shares acquired from
the Company upon exercise of an Option, have been outstanding for at least six
months) having a fair market value on the last business day preceding the date
of exercise equal to the purchase price, or (c) by delivery of an unconditional
and irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (d) if so permitted by the
instrument evidencing the Option (or by the Plan Administrator on or after grant
of the Option), by delivery of a promissory note of the Optionee to the Company,
payable on such terms as are specified by the Plan Administrator, or (e) by any
combination of the permissible forms of payment; PROVIDED, that if the Common
Stock delivered upon exercise of the Option is an original issue of authorized
Common Stock, at least so much of the exercise price as represents the par value
of such Common Stock must be paid other than by the Optionee's promissory note
or personal check. In the event that payment of the option price is made under
(b) above, the Plan Administrator may provide that the Optionee be granted an
additional Option covering the numbers of shares surrendered, at an exercise
price equal to the fair market value of a share of Common Stock on the date of
surrender. For the purpose of this Section, the fair market value of the shares
of Common Stock so delivered to the Company shall be determined in the manner
specified in Section 5.1(c) hereof. As promptly as practicable after receipt of
such written notification and payment, the Company shall deliver to the Optionee
certificates for the number of shares with

                                      -6-
<PAGE>

respect to which such Option has been so exercised, issued in the Optionee's
name; provided, however, that such delivery shall be deemed effected for all
purposes when the Company or a stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to the
Optionee, at the address specified pursuant to Section 6.1.

SECTION 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

      7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The
existence of outstanding Options shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common Stock, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

      7.2. STOCK DIVIDENDS, RECAPITALIZATIONS, ETC. If at any time after the
effective date of the Plan the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of the Common
Stock outstanding, without receiving compensation therefor in money, services or
property, then: (i) the number, class and per share price of shares of stock
subject to outstanding Options hereunder, and the number of shares as to which
automatic formula grants of Options are to be made under Section 4.2 above,
shall be appropriately adjusted in such a manner as to entitle an Optionee to
receive upon exercise of an Option, for the same aggregate cash consideration,
the same total number and class of shares that the owner of an equal number of
outstanding shares of Common Stock would own as a result of the event requiring
the adjustment; and (ii) the number and class of shares with respect to which
Options may be granted under the Plan shall be adjusted by substituting for the
total number of shares of Common Stock then reserved for issuance under the Plan
that number and class of shares of stock that the owner of an equal number of
outstanding shares of Common Stock would own as the result of the event
requiring the adjustment.

      7.3. DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7 shall
be determined by the Plan Administrator and such determinations shall be
conclusive. The Plan Administrator shall have the discretion and power in any
such event to determine and to make effective provision for acceleration of the
time or times at which any Option or portion thereof shall become exercisable.
No fractional shares of Common Stock shall be issued under the Plan on account
of any adjustment specified above.

      7.4. NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore expressly
provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect,

                                      -7-
<PAGE>

and no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock then subject to outstanding Options.

SECTION 8. EFFECT OF CERTAIN TRANSACTIONS

      If the Company is a party to a reorganization or merger with one or more
other corporations, whether or not the Company is the surviving or resulting
corporation, or if the Company consolidates with or into one or more other
corporations, or if the Company is liquidated or sells or otherwise disposes of
substantially all of its assets to another corporation (each hereinafter
referred to as a "Transaction"), in any such event while unexercised Options
remain outstanding under the Plan, then: (i) subject to the provisions of clause
(iii) below, after the effective date of such Transaction unexercised Options
shall remain outstanding and shall be exercisable in shares of Common Stock, or,
if applicable, shares of such stock or other securities, cash or property as the
holders of shares of Common Stock received pursuant to the terms of such
Transaction; (ii) the Plan Administrator may accelerate the time for exercise of
all unexercised and unexpired Options to and after a date prior to the effective
date of such Transaction; or (iii) any outstanding Options may be canceled by
the Plan Administrator as of the effective date of such Transaction, provided
that: (x) notice of such cancellation shall be given to each holder of an
Option; (y) the Plan Administrator shall have accelerated the time for exercise
of all unexercised and unexpired Options that it proposes to cancel; and (z)
each holder of an Option shall have the right to exercise such Option in full.

SECTION 9. AMENDMENT OR TERMINATION OF THE PLAN

      The Board may terminate the Plan at any time, and may amend the Plan at
any time and from time to time, subject to the limitation that, except as
provided in Sections 7 and 8 hereof, rights and obligations under any Option
granted before termination or amendment of the Plan shall not be altered or
impaired by such termination or amendment except with the consent of the
Optionee.

SECTION 10. NON-EXCLUSIVITY OF THE PLAN; NON-UNIFORM DETERMINATIONS

      The adoption of the Plan by the Board shall not be construed as creating
any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including without limitation the granting
of stock options otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.

      The granting of any Option shall not impose upon the Company any
obligation to employ or hire or continue to employ or continue to hire any
Optionee; and the right of the Company to terminate the employment or services
of any Optionee shall not be diminished or affected by reason of the fact that
an Option has been granted to such Optionee.

      The Plan Administrator's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive or are eligible to
receive Options under the

                                      -8-
<PAGE>

Plan (whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Plan Administrator shall be entitled, among
other things, to make non-uniform and selective determinations, and to enter
into non-uniform and selective option agreements, as to (i) the persons to
receive Options under the Plan, (ii) the terms and provisions of Options, (iii)
the exercise by the Plan Administrator of its discretion in respect of the
exercise of Options pursuant to the terms of the Plan, and (iv) the treatment of
leaves of absence pursuant to Section 5.1(e) hereof.

SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW; WITHHOLDING TAXES

      The obligation of the Company to sell and deliver shares of Common Stock
with respect to Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by government
agencies as may be deemed necessary or appropriate by the Plan Administrator.
All shares sold under the Plan shall bear appropriate legends. The Company may,
but shall in no event be obligated to, register or qualify any shares covered by
Options under applicable federal and state securities laws; and in the event
that any shares are so registered or qualified the Company may remove any legend
on certificates representing such shares. The Company shall not be obligated to
take any other affirmative action in order to cause the exercise of an Option or
the issuance of shares pursuant thereto to comply with any law or regulation of
any governmental authority. The Plan shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.

      Whenever under the Plan shares are to be delivered upon exercise of an
Option, the Company shall be entitled to require as a condition of delivery that
the Optionee remit an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto. An employee may elect
to have such tax withholding obligation satisfied, in whole or in part, by: (i)
authorizing the Company to withhold from shares of Common Stock to be issued
pursuant to the exercise of an Option a number of shares with an aggregate fair
market value (as defined in Section 5.1(c) hereof determined as of the date the
withholding is effected) that would satisfy the withholding amount due with
respect to such exercise; or (ii) transferring to the Company shares of Common
Stock owned by the employee with an aggregate fair market value (as defined in
Section 5.1(c) hereof determined as of the date the withholding is effected)
that would satisfy the withholding amount due.

SECTION 12. "LOCKUP" AGREEMENT

      The Plan Administrator may in its discretion specify upon granting an
Option that the Optionee shall agree, for a period of time (not to exceed 180
days) from the effective date of any registration of securities of the Company,
upon request of the Company or the underwriter or underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any Option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such Option, without the prior written
consent of the Company or such underwriter or underwriters, as the case may be.

                                      -9-
<PAGE>

SECTION 13. EFFECTIVE DATE AND DURATION OF PLAN

      The Plan is effective on May 22, 1998, the date of its adoption by the
Board of Directors of the Company. No Option may be granted under the Plan after
the tenth anniversary of the effective date. The Plan shall terminate (i) when
the total amount of the Stock with respect to which Options may be granted shall
have been issued upon the exercise of Options or (ii) by action of the Board
pursuant to Section 9 hereof, whichever shall first occur.

                                      -10-<PAGE>

                                                              Exhibit 4.04(p)

                   AMENDMENT NO. 12 TO SECOND AMENDED AND RESTATED
                      REVOLVING CREDIT AND TERM LOAN AGREEMENT

     This AMENDMENT NO. 12 (this "Amendment"), dated as of June 21, 2000, by
and among MORTON'S RESTAURANT GROUP, INC., a Delaware corporation (formerly
known as Quantum Restaurant Group, Inc.) having its principal place of
business at Suite 210, 3333 New Hyde Park Road, New Hyde Park, New York 11042
(referred to below and in the Credit Agreement, as defined below, as
"Quantum"). PEASANT HOLDING CORP., a Delaware corporation having its principal
place of business at Suite 210, 3333 New Hyde Park Road, New Hyde Park, New
York 11042 ("Peasant Holding"). MORTON'S OF CHICAGO, INC., an Illinois
corporation with its principal place of business at 350 West Hubbard Street,
Chicago, Illinois 60610 ("Morton's") (Quantum, Peasant Holding and Morton's
are referred to herein collectively as the "Borrowers", and each,
individually, as a "Borrower"), FLEET NATIONAL BANK (formerly known as
BankBoston, N.A.), as Agent and Administrative Agent (the "Agent") for the
Lenders (as defined in the Credit Agreement referred to below), FLEET
NATIONAL BANK (formerly known as BankBoston, N.A. and referred to sometimes
in the Credit Agreement, as defined below, as "FNBB") in its individual
capacity as a Lender, THE CHASE MANHATTAN BANK, IMPERIAL BANK and FIRST UNION
NATIONAL BANK, as Lenders, and FIRST UNION NATIONAL BANK, as documentation
agent (the "Documentation Agent") for the Lenders, amends the Second Amended
and Restated Revolving Credit and Term Loan Agreement dated as of June 19,
1995, as amended by the First Amendment dated as of February 14, 1996, the
Second Amendment dated as of March 5, 1996, a letter agreement dated as of
May 2, 1996, the Third Amendment dated as of June 28, 1996, a letter
agreement dated as of November 7, 1996, the Fourth Amendment dated as of
December 26, 1996, the Fifth Amendment dated as of December 31, 1996, the
Sixth Amendment dated as of February 6, 1997, the Seventh Amendment dated as
of June 27, 1997, the Eighth Amendment dated as of February 12, 1998, the
Ninth Amendment dated as of September 25, 1998, the Tenth Amendment dated as
of November 18, 1998, a letter agreement dated as of January 24, 1999, the
Eleventh Amendment dated as of May 20, 1999, a letter agreement dated as of
March 31, 2000, and as the same may be further amended, modified, or
supplemented from time to time (the "Credit Agreement"), by and among the
Borrowers, the Administrative Agent, the Documentation Agent and the Lenders.
Capitalized terms used but not defined herein shall have the meanings set
forth in the Credit Agreement.

     WHEREAS, the Borrowers have requested that the Lenders agree to amend
certain provisions of the Credit Agreement; and

<PAGE>

                                     -2-

     WHEREAS, the Agent and the Lenders, subject to the terms and provisions
hereof, have agreed to so amend the Credit Agreement;

     NOW THEREFORE, the parties hereto hereby agree as follows:

     Section1. AMENDMENTS TO THE CREDIT AGREEMENT. Section 10.5(b) of the
Credit Agreement is hereby amended by deleting the figure "$40,000,000" and
inserting in its place the figure "$50,000,000", and by inserting immediately
after the phrase "$30 per share" the new parenthetical phrase "(such maximum
price per share to be proportionately adjusted from time to time to take into
account the effect of stock splits, reverse stock splits, stock dividends,
and similar applicable, proportional stock transactions occurring from time
to time)".

     Section2. REPRESENTATIONS AND WARRANTIES

     Section2.1. BORROWERS' REPRESENTATIONS AND WARRANTIES. The Borrowers
hereby represent and warrant to the Agent and the Lenders as follows:

     (a)  REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Except as
          specified in writing by the Borrowers to the Agent with respect to
          the subject matter of this Amendment prior to the execution and
          delivery hereof by the Agent and the Lenders, the representations
          and warranties of the Borrowers contained in the Credit Agreement
          were true and correct in all material respects when made and
          continue to be true and correct in all material respects on and as
          of the date hereof, and as of the Effective Date, except, in each
          case to the extent of changes resulting from transactions
          contemplated or permitted by the Loan Documents and this Amendment
          and changes occurring in the ordinary course of business which
          singly or in the aggregate are not materially adverse, and to the
          extent that such representations and warranties relate expressly to
          an earlier date.

     (b)  AUTHORITY, NO CONFLICTS, ENFORCEABILITY OF OBLIGATIONS, ETC. Each
          of the Borrowers hereby confirms that the representations and
          warranties of the Borrowers contained in Sections6.1, 6.3 and 6.4
          of the Credit Agreement are true and correct on and as of the date
          hereof, and as of the Effective Date, as if made on each such date,
          treating this Amendment, the Credit Agreement as amended hereby,
          and the other Loan Documents as amended hereby, as "Loan Documents"
          for the purposes of making said representations and warranties.

     Section3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be deemed to
be effective as of the date hereof (the "Effective Date"), upon the execution
and delivery of this Amendment by each of the Borrowers, each of the
Guarantors, the Agent, and the Majority Lenders.

<PAGE>

                                     -3-

     Section4. NO OTHER AMENDMENTS OR WAIVERS; EXECUTION IN COUNTERPARTS.
Except as otherwise expressly provided by this Amendment, all of the terms,
conditions and provisions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect. Each of the Borrowers and
the Guarantors confirms and agrees that the Obligations of the Borrowers to
the Lenders under the Loan Documents, as amended, supplemented, and increased
hereby, are secured by, guaranteed under, and entitled to the benefits, of
the Security Documents. The Borrowers, the Guarantors, the Agent and the
Lenders hereby acknowledge and agree that all references to the Credit
Agreement and the Obligations thereunder contained in any of the Loan
Documents shall be references to the Credit Agreement and the Obligations, as
amended hereby and as the same may be amended, modified, supplemented, or
restated from time to time. The Security Documents and the perfected first
priority security interests of the Lenders thereunder as collateral security
for the Obligations shall continue in full force and effect, and the
collateral security and guaranties provided for in the Security Documents
shall not be impaired by this Amendment. This Amendment may be executed in
any number of counterparts, but all such counterparts shall together
constitute but one instrument. In making proof of this Amendment it shall not
be necessary to produce or account for more than one counterpart signed by
each party hereto by and against which enforcement hereof is sought.

     Section5. GOVERNING LAW. This Amendment shall be construed according to
and governed by the internal laws of the Commonwealth of Massachusetts
without reference to principles of conflicts of law.

<PAGE>

                                      4

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.

                                    FLEET NATIONAL BANK (formerly known
                                       as BankBoston. N.A.), for itself and as
                                       Administrative Agent

                                    By:          Robert W. MacElhinay
                                        --------------------------------------
                                    Name:        Robert W. MacElhinay
                                        --------------------------------------
                                    Title:       Vice President
                                        --------------------------------------

                                    FIRST UNION NATIONAL BANK, for itself
                                       and as Documentation Agent

                                    By:           Joel Thomas
                                        --------------------------------------
                                    Name:         Joel Thomas
                                        --------------------------------------
                                    Title:        Vice President
                                        --------------------------------------

                                    THE CHASE MANHATTAN BANK

                                    By:           William DeMilt
                                        --------------------------------------
                                    Name:
                                        --------------------------------------
                                    Title:
                                        --------------------------------------

                                    IMPERIAL BANK

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

<PAGE>

                                      5

                                    The Borrowers:

                                    MORTON'S RESTAURANT GROUP, INC.
                                    PEASANT HOLDING CORP.
                                    MORTON'S OF CHICAGO, INC.

                                    By:           Thomas J. Baldwin
                                        --------------------------------------
                                    Name:   Thomas J. Baldwin
                                    Title:  Executive Vice President and Chief
                                            Financial Officer

                                    CONSENTED AND AGREED TO, BY EACH OF
                                    THE GUARANTORS (as defined in the
                                      Credit Agreement)

                                    By:           Thomas J. Baldwin
                                        --------------------------------------
                                    Name:   Thomas J. Baldwin
                                    Title:  Executive Vice President and Chief
                                            Financial Officer for each of the
                                            Guarantors

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]