Document:

<PAGE>
                                                                   EXHIBIT 10.14

                                    FORM OF

                          WESTLAKE CHEMICAL CORPORATION

                           2004 OMNIBUS INCENTIVE PLAN

      1. Purpose of the Plan. The Westlake Chemical Corporation 2004 Omnibus
Incentive Plan (the "Plan") of Westlake Chemical Corporation, a Delaware
corporation (the "Company"), is intended to advance the best interests of the
Company and its Subsidiaries by providing certain Employees and Directors of the
Company and its Subsidiaries with additional incentives through the grant of
Options to purchase common stock, par value US $_____ per share of the Company
("Common Stock"), Stock Appreciation Rights ("SARs"), Restricted Stock, Stock
Units, Cash Awards and/or Performance Awards, thereby increasing the personal
stake of such Employees and Directors in the continued success and growth of the
Company.

      2. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:

            "Administrator" means (i) prior to the closing date of the IPO, the
      Board and (ii) on and after the closing date of the IPO, the Board or a
      committee designated by the Board.

            "Authorized Officer" means the Chief Executive Officer or the Chief
      Administrative Officer of the Company (or any other senior officer of the
      Company to whom the Administrator or such Authorized Officer shall
      delegate the authority to execute any Award Agreement or to carry out any
      actions, duties or other responsibilities under the Plan as may be
      permitted by applicable law and directed by the Administrator, where
      applicable).

            "Award" means an Employee Award or a Director Award.

            "Award Agreement" means a written agreement setting forth the terms,
      conditions and limitations applicable to an Award, to the extent the
      Administrator determines such agreement is necessary.

            "Board" means the Board of Directors of the Company.

            "Cash Award" means an Award denominated in cash.

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

            "Common Stock" means the common stock, par value ______ per share,
      of the Company.

            "Company" means Westlake Chemical Corporation, a Delaware
      corporation, or any successor thereto.
<PAGE>
            "Director" means an individual who is a member of the Board that is
      not an Employee of the Company or any of its Subsidiaries.

            "Director Award" means any Option, Stock Appreciation Right or Stock
      Award granted, whether singly, in combination or in tandem, to a Director
      pursuant to such applicable terms, conditions and limitations as the
      Administrator may establish in order to fulfill the objectives of the
      Plan.

            "Dividend Equivalents" means an amount equal to all dividends and
      other distributions (or the economic equivalent thereof) that are payable
      by the Company on one share of Common Stock to stockholders of record,
      which, in the discretion of the Administrator, may be awarded (i) in
      connection with any Award under the Plan while such Award is outstanding
      or otherwise subject to a Restriction Period and on a like number of
      shares of Common Stock under such Award or (ii) singly.

            "Employee" means an employee of the Company or any of its
      Subsidiaries and an individual who has agreed to become an Employee of the
      Company or any of its Subsidiaries and actually becomes such an Employee
      within the following six months.

            "Employee Award" means any Option, Stock Appreciation Right, Stock
      Award or Cash Award (including any Performance Award) granted, whether
      singly, in combination or in tandem, to an Employee pursuant to such
      applicable terms, conditions and limitations (including treatment as a
      Performance Award) as the Administrator may establish in order to fulfill
      the objectives of the Plan.

            "Fair Market Value" of a share of Common Stock means, as of a
      particular date, (i) (A) if Common Stock is listed on a national
      securities exchange, the mean between the highest and lowest sales price
      per share of the Common Stock on the consolidated transaction reporting
      system for the principal national securities exchange on which shares of
      Common Stock are listed on that date, or, if there shall have been no such
      sale so reported on that date, on the last preceding date on which such a
      sale was so reported, or, at the discretion of the Administrator, the
      price prevailing on the exchange at the time of exercise, (B) the mean
      between the highest and lowest sales price per share of such Common Stock
      reported on the consolidated transaction reporting system for The Nasdaq
      Stock Market, Inc. or, if there shall have been no such sale so reported
      on that date, on the last preceding date on which such a sale was
      reported, (C) if Common Stock is not so listed or quoted, the mean between
      the closing bid and asked price on that date, or, if there are no
      quotations available for such date, on the last preceding date on which
      such quotations shall be available, as reported by The Nasdaq Stock
      Market, Inc., or, if not reported by The Nasdaq Stock Market, Inc., by the
      National Quotation Bureau Incorporated or (D) if Common Stock is not
      publicly traded, the most recent value determined by an independent
      appraiser appointed by the Company for such purpose, or (ii) if
      applicable, the price per share as determined in accordance with the
      procedures of a third party administrator retained by the Company to
      administer the Plan.

            "Grant Date" means the date an Award is granted to a Participant
      pursuant to the Plan. The Grant Date for a substituted award is the Grant
      Date of the original award.

                                      -2-
<PAGE>
            "Grant Price" means the price at which a Participant may exercise
      his or her right to receive cash or Common Stock, as applicable, under the
      terms of an Award.

            "IPO" means the initial public offering of shares of Common Stock of
      the Company (the "IPO").

            "Incentive Option" means an Option that is intended to comply with
      the requirements set forth in Section 422 of the Code.

            "Nonqualified Option" means an Option that is not an Incentive
      Option.

            "Option" means a right to purchase a specified number of shares of
      Common Stock at a specified price.

            "Participant" means an Employee or Director to whom an Award has
      been granted under this Plan.

            "Performance Award" means an Award made pursuant to this Plan that
      is subject to the attainment in the future of one or more Performance
      Goals.

            "Performance Goal" means a standard established by the
      Administrator, to determine in whole or in part whether a Performance
      Award shall be earned.

            "Qualified Performance Award" means a Performance Award made to an
      Employee that is intended to qualify as qualified performance-based
      compensation under Section 162(m) of the Code, as described in Section
      7(a)(v)(B) of the Plan.

            "Restricted Stock" means Common Stock that is restricted or subject
      to forfeiture provisions.

            "Restriction Period" means a period of time beginning as of the
      Grant Date of an Award of Restricted Stock and ending as of the date upon
      which the Common Stock subject to such Award is no longer restricted or
      subject to forfeiture provisions.

            "Stock Appreciation Right" or "SAR" means a right to receive a
      payment, in cash or Common Stock, equal to the excess of the Fair Market
      Value or other specified valuation of a specified number of shares of
      Common Stock on the date the right is exercised over a specified Grant
      Price, in each case as determined by the Administrator.

            "Stock Award" means an Award in the form of shares of Common Stock
      or Stock Units, including an award of Restricted Stock.

            "Stock Unit" means a unit evidencing the right to receive in
      specified circumstances one share of Common Stock (as determined by the
      Administrator) granted to either an Employee or a Director.

            "Subsidiary" means (i) in the case of a corporation, any corporation
      of which the Company directly or indirectly owns shares representing more
      than 50% of the combined voting

                                      -3-
<PAGE>
      power of the shares of all classes or series of capital stock of that
      corporation that have the right to vote generally on matters submitted to
      a vote of the stockholders of that corporation and (ii) in the case of a
      partnership or other business entity not organized as a corporation, any
      such business entity of which the Company directly or indirectly owns more
      than 50% of the voting, capital or profits interests (whether in the form
      of partnership interests, membership interests or otherwise).

      3. Eligibility.

            (a) Employees. Employees eligible for the grant of Employee Awards
      under this Plan are Employees, including Employees that may serve as a
      director of the Company.

            (b) Directors. Members of the Board eligible for the grant of
      Director Awards under this Plan are those who are Directors.

      4. Common Stock Available for Awards. Subject to the provisions of Section
14 hereof, there shall be available for Awards under this Plan granted or
payable wholly or partly in Common Stock (including rights that may be exercised
for or settled in Common Stock) an aggregate of __________ shares, of which
________ shares are available for awards to Directors.

      The number of shares of Common Stock that are the subject of Awards under
this Plan that are forfeited or terminated, expire unexercised, are settled in
cash in lieu of Common Stock or otherwise in a manner such that all or some of
the shares covered by an Award are not issued to a Participant or are exchanged
for Awards that do not involve Common Stock, shall not be counted against the
aggregate plan maximum or any sublimit set forth above and shall again
immediately become available for Awards hereunder. If the tax withholding
obligation resulting from the settlement of any Award is satisfied by
withholding shares of Common Stock, only the number of shares of Common Stock
issued net of the shares of Common Stock withheld shall be deemed delivered for
purposes of determining usage of shares against the maximum number of shares of
Common Stock available for delivery under the Plan or any sublimit set forth
above. Shares of Common Stock delivered under the Plan as an Award or in
settlement of an Award issued or made (a) upon the assumption, substitution,
conversion or replacement of outstanding awards under a plan or arrangement of
an entity acquired in a merger or other acquisition or (b) as a post-transaction
grant under such a plan or arrangement of an acquired entity shall not reduce or
be counted against the maximum number of shares of Common Stock available for
delivery under the Plan, to the extent that the exemption for transactions in
connection with mergers acquisitions from the shareholder approval requirements
of the New York Stock Exchange for equity compensation plans applies. The
Administrator may from time to time adopt and observe such rules and procedures
concerning the counting of shares against the Plan maximum or any sublimit as it
may deem appropriate, including rules more restrictive than those set forth
above to the extent necessary to satisfy the requirements of any national stock
exchange on which the Common Stock is listed or any applicable regulatory
requirement. The Board and the appropriate officers of the Company are
authorized to take from time to time whatever actions are necessary, and to file
any required documents with governmental authorities, stock

                                      -4-
<PAGE>

exchanges and transaction reporting systems to ensure that shares of Common
Stock are available for issuance pursuant to Awards.

      5. Administration.

            (a) This Plan shall be administered by the Administrator, except as
      otherwise provided herein.

            (b) Subject to the provisions hereof, the Administrator shall have
      full and exclusive power and authority to administer this Plan and to take
      all actions that are specifically contemplated hereby or are necessary or
      appropriate in connection with the administration hereof. The
      Administrator shall also have full and exclusive power to interpret this
      Plan and to adopt such rules, regulations and guidelines for carrying out
      this Plan as it may deem necessary or proper. The Administrator may, in
      its discretion, provide for the extension of the exercisability of an
      Award, accelerate the vesting or exercisability of an Award, eliminate or
      make less restrictive any restrictions applicable to an Award, waive any
      restriction or other provision of this Plan (insofar as such provision
      relates to Awards) or an Award or otherwise amend or modify an Award in
      any manner that is either (i) not adverse to the Participant to whom such
      Award was granted or (ii) consented to by such Participant.
      Notwithstanding anything herein to the contrary, without the prior
      approval of the Company's stockholders, Awards issued under the Plan will
      not be repriced, replaced or regranted through cancellation or by
      decreasing the exercise price of a previously granted Award. The
      Administrator may make an Award to an individual who it expects to become
      an Employee of the Company or any of its Subsidiaries within the next six
      months, with such award being subject to the individual's actually
      becoming an Employee within such time period, and subject to such other
      terms and conditions as may be established by the Administrator. The
      Administrator may correct any defect or supply any omission or reconcile
      any inconsistency in this Plan or in any Award in the manner and to the
      extent the Administrator deems necessary or desirable to further the Plan
      purposes. Any decision of the Administrator, with respect to Awards, in
      the interpretation and administration of this Plan shall lie within its
      sole and absolute discretion and shall be final, conclusive and binding on
      all parties concerned.

            (c) No member of the Administrator or Authorized Officer of the
      Company to whom the Administrator has delegated authority in accordance
      with the provisions of Section 6 of this Plan shall be liable for anything
      done or omitted to be done by him or her, by any member of the
      Administrator or by any officer of the Company in connection with the
      performance of any duties under this Plan, except for his or her own
      willful misconduct or as expressly provided by statute.

      6. Delegation of Authority. Following the authorization of a pool of cash
or shares of Common Stock to be available for Awards, the Administrator may
authorize an Authorized Officer of the Company, if and to the extent permitted
by applicable law, rule or regulation, or a subcommittee of members of the
Administrator to grant individual Employee Awards from such pool pursuant to
such conditions or limitations as the Administrator may establish. The
Administrator may also delegate to an Authorized Officer its administrative
duties under this Plan (excluding its granting authority) pursuant to such
conditions or limitations as the

                                      -5-
<PAGE>
Administrator may establish. The Administrator may engage or authorize the
engagement of a third party administrator to carry out administrative functions
under the Plan.

      7. Awards.

            (a) The Administrator shall determine the type or types of Awards to
      be made under this Plan and shall designate from time to time the
      Participants who are to be the recipients of such Awards. Each Award may,
      in the discretion of the Administrator, be embodied in an Award Agreement,
      which shall contain such terms, conditions and limitations as shall be
      determined by the Administrator in its sole discretion and, if required by
      the Administrator, shall be signed by the Participant to whom the Award is
      granted and by an Authorized Officer for and on behalf of the Company.
      Awards may consist of those listed in this Section 7(a) and may be granted
      singly, in combination or in tandem. Awards may also be granted in
      combination or in tandem with, in replacement of (subject to Sections 12
      and 9(d)), or as alternatives to, grants or rights under this Plan or any
      other plan of the Company or any of its Subsidiaries, including the plan
      of any acquired entity. An Award may provide for the grant or issuance of
      additional, replacement or alternative Awards upon the occurrence of
      specified events. All or part of an Award may be subject to conditions
      established by the Administrator, which may include, but are not limited
      to, continuous service with the Company and its Subsidiaries, achievement
      of specific business objectives, items referenced to in clause (v) below,
      and other comparable measurements of performance. Upon an Employee's
      termination of employment, any unexercised, deferred, unvested or unpaid
      Employee Awards shall be treated as set forth in the applicable Employee
      Award Agreement or as otherwise specified by the Administrator.

                  (i) Option. An Employee Award may be in the form of an
            Incentive Option or a Nonqualified Option. A Director Award may be
            in the form of a Nonqualified Option. The term of the Option shall
            extend no more than 10 years after the Grant Date. The price at
            which any share of Common Stock may be purchased on the exercise of
            any Option will not be less than the Fair Market Value of a share of
            the Common Stock on the date of grant of that Option. Subject to the
            foregoing provisions, the terms, conditions and limitations
            applicable to any Options awarded pursuant to this Plan, including
            the Grant Price, minimum vesting, the number of shares subject to
            the Option and the date or dates upon which they become exercisable,
            shall be determined by the Administrator.

                  (ii) Stock Appreciation Rights. An Award may be in the form of
            an SAR. SARs may be granted in tandem with an Option or other Award,
            either at the time of grant or by later amendment thereto, or on a
            freestanding basis not related to any other Award. The Grant Price
            of an SAR shall be determined by the Administrator but shall not be
            less than the Fair Market Value of the Common Stock subject to such
            SAR on the Grant Date or the Grant Price of a tandem Option to which
            such SAR relates. The holder of a tandem SAR may elect to exercise
            either the Option or the SAR, but not both. The exercise period for
            an SAR shall extend no more than 10 years after the Grant Date.
            Subject to the

                                      -6-
<PAGE>
            foregoing provisions, the terms, conditions and limitations
            applicable to any SARs awarded to Participants pursuant to this
            Plan, including the Grant Price, the term of any SARs and the date
            or dates upon which they become exercisable, shall be determined by
            the Administrator.

                  (iii) Stock Award. An Employee Award or Director Award may be
            in the form of a Stock Award. The terms, conditions and limitations
            applicable to any Stock Awards granted to Participants pursuant to
            this Plan shall be determined by the Administrator, subject to the
            limitations specified below.

                  (iv) Cash Award. An Employee Award may be in the form of a
            Cash Award. The terms, conditions and limitations applicable to any
            Cash Awards granted pursuant to this Plan shall be determined by the
            Administrator.

                  (v) Performance Award. Without limiting the type or number of
            Employee Awards or Director Awards that may be made under the other
            provisions of this Plan, an Employee Award or Director Award may be
            in the form of a Performance Award. The terms, conditions and
            limitations applicable to any Performance Awards granted to
            Participants pursuant to this Plan shall be determined by the
            Administrator, subject to the limitations specified below. The
            Administrator shall set Performance Goals in its discretion which,
            depending on the extent to which they are met, will determine the
            value and/or amount of Performance Awards that will be paid out to
            the Participant and/or the portion of an Award that may be
            exercised.

                        (A) Nonqualified Performance Awards. Performance Awards
                  granted to Employees or Directors that are not intended to
                  qualify as qualified performance-based compensation under
                  Section 162(m) of the Code shall be based on achievement of
                  such Performance Goals and be subject to such terms,
                  conditions and restrictions as the Administrator or its
                  delegate shall determine.

                        (B) Qualified Performance Awards. Performance Awards
                  granted to Employees under the Plan that are intended to
                  qualify as qualified performance-based compensation under
                  Section 162(m) of the Code shall be paid, vested or otherwise
                  deliverable solely on account of the attainment of one or more
                  pre-established, objective Performance Goals established by
                  the Administrator prior to the earlier to occur of (x) 90 days
                  after the commencement of the period of service to which the
                  Performance Goal relates and (y) the lapse of 25% of the
                  period of service (as scheduled in good faith at the time the
                  goal is established), and in any event while the outcome is
                  substantially uncertain. A Performance Goal is objective if a
                  third party having knowledge of the relevant facts could
                  determine whether the goal is met. Such a Performance Goal may
                  be based on one or more business criteria that apply to the
                  Employee, one or more business units, divisions or sectors of
                  the Company, or the Company as a whole, and if so desired by
                  the Administrator, by comparison with a

                                      -7-
<PAGE>
                  peer group of companies. A Performance Goal may include one or
                  more of the following: increased revenue; net income measures
                  (including but not limited to income after capital costs and
                  income before or after taxes); stock price measures (including
                  but not limited to growth measures and total stockholder
                  return); price per share of Common Stock; market share; net
                  earnings; earnings per share (actual or targeted growth);
                  earnings before interest, taxes, depreciation, and
                  amortization ("EBITDA"); earnings before interest, taxes and
                  amortization ("EBITA"); economic value added (or an equivalent
                  metric); market value added; debt to equity ratio; cash flow
                  measures (including but not limited to cash flow per share,
                  cash flow return on capital, cash flow return on tangible
                  capital, net cash flow, net cash flow before financing
                  activities and improvement in or attainment of working capital
                  levels); return measures (including but not limited to return
                  on equity, return on average assets, return on capital,
                  risk-adjusted return on capital, return on investors' capital
                  and return on average equity); operating measures (including
                  operating income, funds from operations, cash from operations,
                  after-tax operating income; net operating profit after tax,
                  sales volumes, operating efficiency, production volumes and
                  production efficiency); expense measures (including but not
                  limited to overhead cost, general and administrative expense
                  and improvement in or attainment of expense levels); margins;
                  stockholder value; proceeds from dispositions; total market
                  value; safety; reliability; productivity; corporate values
                  measures (including ethics compliance, environmental, and
                  safety) and debt reduction.

                        Unless otherwise stated, such a Performance Goal need
                  not be based upon an increase or positive result under a
                  particular business criterion and could include, for example,
                  maintaining the status quo or limiting economic losses
                  (measured, in each case, by reference to specific business
                  criteria). In interpreting Plan provisions applicable to
                  Performance Goals and Qualified Performance Awards, it is the
                  intent of the Plan to conform with the standards of Section
                  162(m) of the Code and Treasury Regulation Section
                  1.162-27(e)(2)(i), as to grants to those Employees whose
                  compensation is, or is likely to be, subject to Section 162(m)
                  of the Code, and the Administrator in establishing such goals
                  and interpreting the Plan shall be guided by such provisions.
                  Prior to the payment of any compensation based on the
                  achievement of Performance Goals applicable to Qualified
                  Performance Awards, the Administrator must certify in writing
                  that applicable Performance Goals and any of the material
                  terms thereof were, in fact, satisfied. Subject to the
                  foregoing provisions, the terms, conditions and limitations
                  applicable to any Qualified Performance Awards made pursuant
                  to this Plan shall be determined by the Administrator.

            (b) Notwithstanding anything to the contrary contained in this Plan,
      the following limitations shall apply to any Employee Awards made
      hereunder:

                                      -8-
<PAGE>
                  (i) no Participant may be granted, during any calendar year,
            Employee Awards consisting of Options or SARs that are exercisable
            for more than _______ shares of Common Stock (the limitation set
            forth in this clause (b)(i), together with the limitations set forth
            in clauses (b)(ii) below, being hereinafter collectively referred to
            as the "Stock Based Awards Limitations");

                  (ii) no Participant may be issued, during any calendar year,
            more than _________ shares of Common Stock in connection with Stock
            Awards.

                  (iii) no Participant may be granted Employee Awards consisting
            of Cash Awards that are intended to constitute performance-based
            awards subject to Section 7(a)(v)(B) having a maximum payment value
            in any calendar year in excess of $5,000,000.

      8. Non-United States Participants. The Administrator may grant awards to
persons outside the United States under such terms and conditions as may, in the
judgment of the Administrator, be necessary or advisable to comply with the laws
of the applicable foreign jurisdictions and, to that end, may establish
sub-plans, modified option exercise procedures and other terms and procedures.
Notwithstanding the above, the Administrator may not take any actions hereunder,
and no Awards shall be granted, that would violate the Code, any securities law,
any governing statute, or any other applicable law.

      9. Payment of Awards.

            (a) General. Payment made to a Participant pursuant to an Award may
      be made in the form of cash or Common Stock, or a combination thereof, and
      may include such restrictions as the Administrator shall determine,
      including, in the case of Common Stock, restrictions on transfer and
      forfeiture provisions. If such payment is made in the form of Restricted
      Stock, the Administrator shall specify whether the underlying shares are
      to be issued at the beginning or end of the Restriction Period. In the
      event that shares of Restricted Stock are to be issued at the beginning of
      the Restriction Period, the certificates evidencing such shares (to the
      extent that such shares are so evidenced) shall contain appropriate
      legends and restrictions that describe the terms and conditions of the
      restrictions applicable thereto. In the event that shares of Restricted
      Stock are to be issued at the end of the Restricted Period, the right to
      receive such shares shall be evidenced by book entry registration or in
      such other manner as the Administrator may determine.

            (b) Deferral. With the approval of the Administrator, amounts
      payable in respect of Awards may be deferred and paid either in the form
      of installments or as a lump-sum payment. The Administrator may permit
      selected Participants to elect to defer payments of some or all types of
      Awards or any other compensation otherwise payable by the Company in
      accordance with procedures established by the Administrator and may
      provide that such deferred compensation may be payable in shares of Common
      Stock. Any deferred payment pursuant to an Award, whether elected by the
      Participant or specified by the Award Agreement or the terms of the Award
      or by the Administrator,

                                      -9-
<PAGE>
      may be forfeited if and to the extent that the Award Agreement or the
      terms of the Award so provide.

            (c) Dividends, Earnings and Interest. Rights to dividends or
      Dividend Equivalents may be extended to and made part of any Award,
      subject to such terms, conditions and restrictions as the Administrator
      may establish. The Administrator may also establish rules and procedures
      for the crediting of interest or other earnings on deferred cash payments
      and Dividend Equivalents for Awards.

            (d) Substitution of Awards. Subject to Sections 12 and 14, at the
      discretion of the Administrator, an Employee may be offered an election to
      substitute an Employee Award for another Employee Award or Employee Awards
      of the same or different type; provided, however, that no Option may be
      granted in exchange or in replacement of an Option having a higher
      exercise price.

      10. Payment of Grant Price. The Grant Price shall be paid in full at the
time of exercise in cash or, if permitted by the Administrator and elected by
the Participant, the Participant may purchase such shares by means of tendering
Common Stock or surrendering another Award valued at Fair Market Value on the
date of exercise, or any combination thereof. The Administrator shall determine
acceptable methods and requirements for Participants to tender Common Stock or
other Awards. The Administrator may provide for procedures to permit the
exercise or purchase of such Awards by use of the proceeds to be received from
the sale of Common Stock issuable pursuant to an Award. The Administrator may
adopt additional rules and procedures regarding the payment of the Grant Price
of Awards from time to time, provided that such rules and procedures are not
inconsistent with the provisions of this Section 10.

      A Participant desiring to pay the Grant Price of an Option by tendering
Common Stock using the method of attestation may, subject to any such conditions
and in compliance with any such procedures as the Administrator may adopt, do so
by attesting to the ownership of Common Stock of the requisite value in which
case the Company shall issue or otherwise deliver to the Participant upon such
exercise a number of shares of Common Stock subject to the Option equal to the
result obtained by dividing (a) the excess of the aggregate Fair Market Value of
the shares of Common Stock subject to the Option for which the Option (or
portion thereof) is being exercised over the Grant Price payable in respect of
such exercise by (b) the Fair Market Value per share of Common Stock subject to
the Option, and the Participant may retain the shares of Common Stock the
ownership of which is attested.

      11. Taxes. The Company or its designated third party administrator shall
have the right to deduct applicable taxes from any Award payment and withhold,
at the time of delivery or vesting of cash or shares of Common Stock under this
Plan, an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes or other amounts required by law or to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes. The Administrator may
also permit withholding to be satisfied by the transfer to the Company of shares
of Common Stock theretofore owned by the holder of the Award with respect to
which withholding is required. If

                                      -10-
<PAGE>
shares of Common Stock are used to satisfy tax withholding, such shares shall be
valued based on the Fair Market Value when the tax withholding is required to be
made.

      12. Amendment, Modification, Suspension or Termination of the Plan. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements or the applicable requirements of the
securities exchange on which the Company's Common Stock is listed.

      13. Assignability. Unless otherwise determined by the Administrator and
provided in the Award Agreement or the terms of the Award, no Award or any other
benefit under this Plan shall be assignable or otherwise transferable except by
will, by beneficiary designation or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder. In
the event that a beneficiary designation conflicts with an assignment by will,
the beneficiary designation will prevail. The Administrator may prescribe and
include in applicable Award Agreements or the terms of the Award other
restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this Section 13 shall be null and void.

      14. Adjustments.

            (a) From and after the closing date of the IPO, the existence of
      outstanding Awards shall not affect in any manner 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
      capital stock of the Company or its business or any merger or
      consolidation of the Company, or any issue of bonds, debentures, preferred
      or prior preference stock (whether or not such issue is prior to, on a
      parity with or junior to the existing Common Stock) 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 of any
      kind, whether or not of a character similar to that of the acts or
      proceedings enumerated above.

            (b) From and after the closing date of the IPO, in the event of any
      subdivision or consolidation of outstanding shares of Common Stock,
      declaration of a dividend payable in shares of Common Stock or other stock
      split, then (i) the number of shares of Common Stock reserved under this
      Plan and available for issuance pursuant to specific types of Awards as
      described in Section 4, (ii) the number of shares of Common Stock covered
      by outstanding Awards, (iii) the appropriate Fair Market Value and other
      price determinations for such Awards, and (iv) the Stock Based Awards
      Limitations shall each be proportionately adjusted by the Administrator as
      appropriate to reflect such transaction. In the event of any other
      recapitalization or capital reorganization of the Company, any
      consolidation or merger of the Company with another Company or entity,

                                      -11-
<PAGE>
      the adoption by the Company of any plan of exchange affecting Common Stock
      or any distribution to holders of Common Stock of securities or property
      (other than normal cash dividends or dividends payable in Common Stock),
      the Administrator shall make appropriate adjustments to (x) the number of
      shares of Common Stock reserved under this Plan and (y)(i) the number of
      shares of Common Stock covered by Awards, (ii) the Grant Price or other
      price in respect of such Awards, (iii) the appropriate Fair Market Value
      and other price determinations for such Awards, and (iv) the Stock Based
      Awards Limitations to reflect such transaction; provided that such
      adjustments shall only be such as are necessary to maintain the
      proportionate interest of the holders of the Awards and preserve, without
      increasing, the value of such Awards. In the event of a corporate merger,
      consolidation, acquisition of assets or stock, separation, reorganization,
      or liquidation, the Board shall be authorized (x) to assume under the Plan
      previously granted compensatory awards, or to substitute new Awards for
      previously granted compensatory awards, including Awards, as part of such
      adjustment; (y) to cancel Awards that are Options or SARs and give the
      Participants who are the holders of such Awards notice and opportunity to
      exercise for 30 days prior to such cancellation; or (z) to cancel any such
      Awards and to deliver to the Participants cash in an amount that the Board
      shall determine in its sole discretion is equal to the fair market value
      of such Awards on the date of such event, which in the case of Options or
      SARs shall be the excess of the Fair Market Value of Common Stock on such
      date over the exercise or strike price of such Award.

      15. Restrictions. No Common Stock or other form of payment shall be issued
with respect to any Award unless the Company shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws. Certificates evidencing shares of Common
Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Administrator may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Administrator may cause a legend or legends to be placed
upon such certificates (if any) to make appropriate reference to such
restrictions.

      16. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience, including
bookkeeping accounts established by a third party administrator retained by the
Company to administer the Plan. The Company shall not be required to segregate
any assets for purposes of this Plan or Awards hereunder, nor shall the Company,
the Board or the Administrator be deemed to be a trustee of any benefit to be
granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to an Award under this Plan shall be based solely upon
any contractual obligations that may be created by this Plan and any Award
Agreement or the terms of the Award, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Administrator
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

                                      -12-
<PAGE>
      17. Right to Employment. Nothing in the Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or other service relationship at any time, nor confer
upon any Participant any right to continue in the capacity in which he or she is
employed or otherwise serves the Company.

      18. Successors. All obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.

      19. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Texas.

      20. Effectiveness; Term. The Plan shall be effective on the date the Plan
has been approved by the Board. No Awards shall be made after the tenth
anniversary of the effective date of the Plan.<PAGE>

                                                                     EXHIBIT 4.2

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.

                            WARRANT TO PURCHASE STOCK

Company:            Superconductor Technologies Inc., a Delaware corporation
Number of Shares:   100,000
Class of Stock:     Common
Warrant Price:      $1.85
Issue Date:         Warrant Effective Date (i.e., the date Holder executes this
                    Warrant)
Expiration Date:    7th Anniversary of the Issue Date

      THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the company (the "Company") at the Warrant
Price all as set forth above and as adjusted pursuant to Article 2 of this
Warrant, subject to the provisions and upon the terms and conditions set forth
in this Warrant.

ARTICLE 1. EXERCISE.

            1.1   Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Article 1.2, Holder shall also
deliver to the Company a check, wire transfer (to an account designated by the
Company), or other from of payment acceptable to the Company for the aggregate
Warrant Price for the Shares being purchased.

            1.2   Conversion Right. In lieu of exercising this Warrant as
specified in Article 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Article 1.3.

            1.3   Fair Market Value. If the Company's common stock is traded in
a public market and the shares are common stock, the fair market value of each
Share shall be the closing price of a Share reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company (or in
the instance where the Warrant is exercised immediately prior to the
effectiveness of the Company's initial public offering, the "price to public"
per share price specified in the final prospectus relating to such offering). If
the Company's common stock is traded in a public market and the Shares are
preferred stock, the fair market value of a Share shall be the closing price of
a share of the Company's common stock reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company (or, in the
instance where the Warrant is exercised immediately prior to the effectiveness
of the Company's initial public offering, the initial "price to public" per
share price specified in the final prospectus relating to such offering), in
both cases, multiplied by the number of shares of the Company's

<PAGE>

common stock into which a Share is convertible. If the Company's common stock is
not traded in a public market, the Board of Directors of the Company shall
determine fair market value in its reasonable good faith judgment.

            1.4   Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant and, if applicable, the Company receives
payment of the aggregate Warrant Price, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

            1.5   Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor.

            1.6   Treatment of Warrant Upon Acquisition of Company.

                  1.6.1 "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

                  1.6.2 Treatment of Warrant at Acquisition.

A)    Upon the written request of the Company, Holder agrees that, in the event
of an Acquisition in which the sole consideration is cash, either (a) Holder
shall exercise its conversion or purchase right under this Warrant and such
exercise will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant
will expire upon the consummation of such Acquisition. The Company shall provide
the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in
connection with such contemplated Acquisition giving rise to such notice), which
is to be delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.

B)    Upon the written request of the Company, Holder agrees that, in the event
of an Acquisition that is an "arms length" sale of all or substantially all of
the Company's assets (and only its assets) to a third party that is not an
Affiliate (as defined below) of the Company (a "True Asset Sale"), either (a)
Holder shall exercise its conversion or purchase right under this Warrant and
such exercise will be deemed effective immediately prior to the consummation of
such Acquisition or (b) if Holder elects not to exercise the Warrant, this
Warrant will continue until the Expiration Date if the Company continues as a
going concern following the closing of any such True Asset Sale. The Company
shall provide the Holder with written notice of its request relating to the
foregoing (together with such reasonable information as the Holder may request
in connection with such contemplated Acquisition giving rise to such notice),
which is to be delivered to Holder not less than ten (10) days prior to the
closing of the proposed Acquisition.

C)    Upon the closing of any Acquisition other than those particularly
described in subsections (A) and (B) above, the successor entity shall assume
the obligations of this Warrant, and this Warrant shall be exercisable for the
same securities, cash, and property as would be payable for the Shares issuable
upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date

                                       2
<PAGE>

for the Acquisition and subsequent closing. The Warrant Price and/or number of
Shares shall be adjusted accordingly.

As used herein "Affiliate" shall mean any person or entity that owns or controls
directly or indirectly ten (10) percent or more of the stock of Company, any
person or entity that controls or is controlled by or is under common control
with such persons or entities, and each of such person's or entity's officers,
directors, joint venturers or partners, as applicable.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

            2.1   Stock Dividends, Splits, Etc. If the Company declares or pays
a dividend on the Shares payable in common stock, or other securities, then upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
cost to Holder, the total number and kind of securities to which Holder would
have been entitled had Holder owned the Shares of record as of the date the
dividend occurred. If the Company subdivides the Shares by reclassification or
otherwise into a greater number of shares or takes any other action which
increase the amount of stock into which the Shares are convertible, the number
of shares purchasable hereunder shall be proportionately increased and the
Warrant Price shall be proportionately decreased. If the outstanding shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased and the number
of Shares shall be proportionately decreased.

            2.2   Reclassification, Exchange, Combinations or Substitution. Upon
any reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company's Articles or
Certificate (as applicable) of Incorporation upon the closing of a registered
public offering of the Company's common stock. The Company or its successor
shall promptly issue to Holder an amendment to this Warrant setting forth the
number and kind of such new securities or other property issuable upon exercise
or conversion of this Warrant as a result of such reclassification, exchange,
substitution or other event that results in a change of the number and/or class
of securities issuable upon exercise or conversion of this Warrant. The
amendment to this Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Article 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.

            2.3   Intentionally Omitted.

            2.4   No Impairment. The Company shall not, by amendment of its
Articles or Certificate (as applicable) of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder's rights under this
Article against impairment.

                                       3
<PAGE>

            2.5   Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder the amount computed by
multiplying the fractional interest by the fair market value of a full Share.

            2.6   Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company shall promptly notify Holder in writing, and, at the
Company's expense, promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the
facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect
upon the date thereof and the series of adjustments leading to such Warrant
Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

            3.1   Representations and Warranties. The Company represents and
warrants to the Holder as follows:

                  (a)   The initial Warrant Price referenced on the first page
of this Warrant is not greater than the fair market value of the Shares as of
the date of this Warrant.

                  (b)   All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.

                  (c)   The Capitalization Table previously provided to Holder
remains true and complete as of the Issue Date.

            3.2   Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon any of its stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for sale additional shares of any class or series of the
Company's stock; (c) to effect any reclassification or recapitalization of any
of its stock; (d) to merge or consolidate with or into any other corporation, or
sell, lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company shall
give Holder: (1) at least 10 days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 10 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.

            3.3   Registration Under Securities Act of 1933, as amended. The
Company agrees that the Shares or, if the Shares are convertible into common
stock of the Company, such common stock, shall be subject to the registration
rights set forth on Exhibit A.

                                       4
<PAGE>

            3.4   No Shareholder Rights. Except as provided in this Warrant, the
Holder will not have any rights as a shareholder of the Company until the
exercise of this Warrant.

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and
warrants to the Company as follows:

            4.1   Purchase for Own Account. This Warrant and the securities to
be acquired upon exercise of this Warrant by the Holder will be acquired for
investment for the Holder's account, not as a nominee or agent, and not with a
view to the public resale or distribution within the meaning of the Act. Holder
also represents that the Holder has not been formed for the specific purpose of
acquiring this Warrant or the Shares.

            4.2   Disclosure of Information. The Holder has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the acquisition of this Warrant
and its underlying securities. The Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.

            4.3   Investment Experience. The Holder understands that the
purchase of this Warrant and its underlying securities involves substantial
risk. The Holder has experience as an investor in securities of companies in the
development stage and acknowledges that the Holder can bear the economic risk of
such Holder's investment in this Warrant and its underlying securities and has
such knowledge and experience in financial or business matters that the Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the Holder to be aware
of the character, business acumen and financial circumstances of such persons.

            4.4   Accredited Investor Status. The Holder is an "accredited
investor" within the meaning of Regulation D promulgated under the Act.

            4.5   The Act. The Holder understands that this Warrant and the
Shares issuable upon exercise or conversion hereof have not been registered un
the Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of the Holder's investment intent
as expressed herein. The Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the 1933 Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.

ARTICLE 5. MISCELLANEOUS.

            5.1   Term: This Warrant is exercisable in whole or in part at any
time and from time to time on or before the Expiration Date.

            5.2   Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:

            THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE

                                       5
<PAGE>

            NOT BEEN REGISTERED UNDER THE ACT, OR THE SECURITIES LAWS OF ANY
            STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW,
            MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
            HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND
            APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL
            IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
            SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
            EXEMPT FROM REGISTRATION.

            5.3   Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to Silicon Valley Bancshares (Holder's
parent company) or any other affiliate of Holder. Additionally, the Company
shall also not require an opinion of counsel if there is no material question as
to the availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail,
the selling broker represents that it has complied with Rule 144(f), and the
Company is provided with a copy of Holder's notice of proposed sale.

            5.4   Transfer Procedure. Upon receipt by Holder of the executed
Warrant, Holder will transfer all of this Warrant to Silicon Valley Bancshares,
Holder's parent company, by execution of an Assignment substantially in the form
of Appendix 2. Subject to the provisions of Article 5.3 and upon providing
Company with written notice, Silicon Valley Bancshares and any subsequent Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the Shares issuable directly or indirectly, upon conversion of
the Shares, if any) to any transferee, provided, however, in connection with any
such transfer, Silicon Valley Bancshares or any subsequent Holder will give the
Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will
surrender this Warrant to the Company for reissuance to the transferee(s) (and
Holder if applicable). The Company may refuse to transfer this Warrant or the
Shares to any person who directly competes with the Company, unless, in either
case, the stock of the Company is publicly traded.

            5.5   Notices. All notices and other communications from the Company
to the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may (or on the first business day after transmission by
facsimile) be, in writing by the Company or such holder from time to time.
Effective upon receipt of the fully executed Warrant and the initial transfer
described in Article 5.4 above, all notices to the Holder shall be addressed as
follows until the Company receives notice of a change of address in connection
with a transfer or otherwise:

                  Silicon Valley Bancshares
                  Attn:  Treasury Department
                  3003 Tasman Drive, HA 200
                  Santa Clara, CA 95054
                  Telephone: 408-654-7400
                  Facsimile: 408-496-2405

                                       6
<PAGE>

      Notice to the Company shall be addressed as follows until the Holder
receives notice of a change in address:

                  Superconductor Technologies
                  Attn: Martin S. McDermut
                  460 Ward Drive
                  Santa Barbara, CA 93111-2310
                  Telephone (805) 690-4539
                  Facsimile: (805) 682-9496

            5.6   Waiver. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.

            5.7   Attorney's Fees. In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorney's fees.

            5.8   Automatic Conversion upon Expiration. In the event that, upon
the Expiration Date, the fair market value of one Share (or other security
issuable upon the exercise hereof) as determined in accordance with Section 1.3
above is greater than the Exercise Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for
which it shall not previously have been exercised or converted, and the Company
shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder.

            5.9   Counterparts. This Warrant may be executed in counterparts,
all of which together shall constitute one and the same agreement.

            5.10  Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.

                                       7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the date first written above.

                                     "COMPANY"
                                     Superconductor Technologies Inc.

                                     By:__________________________________

                                     Name: _______________________________
                                           (Print)
                                     Title: Chairman of the Board, President or
                                            Vice President

                                     By:__________________________________

                                     Name: _______________________________
                                            (Print)
                                     Title: Chief Financial Officer, Secretary,
                                            Assistant Treasurer or Assistant
                                            Secretary

                                     "HOLDER"
                                     Silicon Valley Bank

                                     By:__________________________________

                                     Name:________________________________

                                     Title:_______________________________

Warrant Effective Date: ___________

                                       8
<PAGE>

                                   APPENDIX 1

                               NOTICE OF EXERCISE

      1.    Holder elects to purchase ___________ shares of the Common Stock of
Superconductor Technologies Inc. pursuant to the terms of the attached Warrant,
and tenders payment of the purchase price of the shares in full.

            [or]

      1.    Holder elects to convert the attached Warrant into Shares/cash
[strike one] in the manner specified in the Warrant. This conversion is
exercised for _____________________ of the Shares covered by the Warrant.

      [Strike paragraph that does not apply.]

      2.    Please issue a certificate or certificates representing the shares
in the name specified below:

                  ___________________________________________
                           Holders Name

                  ___________________________________________

                  ___________________________________________
                           (Address)

      3.    By its execution below and for the benefit of the Company, Holder
hereby restates each of the representations and warranties in Article 4 of the
Warrant as the date hereof.

                                           HOLDER:

                                           __________________________________

                                           By:_______________________________

                                           Name:_____________________________

                                           Title:____________________________

                                           (Date):___________________________

<PAGE>

                                   APPENDIX 2

                                   ASSIGNMENT

For value received, Silicon Valley Bank hereby sells, assigns and transfers unto
                  Name:       Silicon Valley Bancshares
                  Address:    3003 Tasman Drive (HA-200)
                              Santa Clara, CA 95054

                  Tax ID: 91-1962278

that certain Warrant to Purchase Stock issued by Superconductor Technologies
Inc. (the "Company"), on ____________________ (the "Warrant") together with all
rights, title and interest therein.

                                           Silicon Valley Bank

                                           By:______________________________

                                           Name:____________________________

                                           Title:___________________________

Date: [insert Issue Date]____________

By its execution below, and for the benefit of the Company, Silicon Valley
Bancshares makes each of the representations and warranties set forth in Article
4 of the Warrant as of the date hereof.

                                           Silicon Valley Bancshares

                                           By:______________________________

                                           Name:____________________________

                                           Title:___________________________

<PAGE>

                                   "EXHIBIT A"
                               SILICON VALLEY BANK
                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT is entered into as of Warrant Effective
Date, by and between Silicon Valley Bank ("Purchaser") and the Company whose
name appears on the last page of this Agreement.

                                    RECITALS

      A.    Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant
to which Purchaser has the right to acquire from the Company the Shares (as
defined in the Warrant).

      B.    By this Agreement, the Purchaser and the Company desire to set forth
the registration rights of the Shares all as provided herein.

      C.    Capitalized terms used herein shall have the same meaning as set
forth in the Warrant.

            NOW, THEREFORE, in consideration of the mutual promises, covenants
and conditions hereinafter set forth, the parties hereto mutually agree as
follows:

      1.    Registration Rights. The Company covenants and agrees as follows:

            1.1   Definitions. For purposes of this Section 1:

                  (a)   The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), and the declaration or ordering of effectiveness
of such registration statement or document;

                  (b)   The term "Registrable Securities" means (i) the Shares
(if Common Stock) or all shares of Common Stock of the Company issuable or
issued upon conversion of the Shares and (ii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any stock referred to in (i).

                  (c)   The terms "Holder" or "Holders" means the Purchaser or
qualifying transferees under subsection 1.8 hereof who hold Registrable
Securities.

                  (d)   The term "SEC" means the Securities and Exchange
Commission.

            1.2   Company Registration.

                  (a)   Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, for its own account
or the account of any of its shareholders, other than a registration on Form S-1
or S-8 relating solely to employee stock option or purchase plans, or a
registration on Form S-4 relating solely to an SEC Rule 145 transaction, or a
registration on any other form (other than Form S-1, S-2, S-3 or S-18, or their
successor forms) or any successor to such forms,

<PAGE>

which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities, the Company will:

                        (i)   promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and

                        (ii)  include in such registration (and compliance), and
in any underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 30 days after receipt of such
written notice from the Company, by any Holder or Holders, except as set forth
in subsection 1.2(b) below.

                  (b)   Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subsection 1.2 (a) (i). In such event the right of any Holder to
registration pursuant to this subsection 1.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company.

            1.3   Expenses of Registration. All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Company except the Company shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable Securities.
All expenses of any registered offering not otherwise borne by the Company shall
be borne pro rata among the Holders participating in the offering and the
Company.

            1.4   Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in subsection 1.3, at its expense the Company will:

                  (a)   Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to 120 days.

                  (b)   Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

                  (c)   Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

                                       2
<PAGE>

                  (d)   Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

                  (e)   In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

                  (f)   Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

            1.5   Indemnification.

                  (a)   The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each person
controlling such Holder, with respect to which such registration, qualification
or compliance has been effected pursuant to this Rights Agreement, and each
underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, or any
violation or alleged violation by the Company of the Securities Act, the
Securities Exchange Act of 1934, as amended, ("Exchange Act") or any state
securities law applicable to the Company or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any such state law and relating to
action or inaction required of the Company in connection with any such
registration, qualification of compliance, and will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
within a reasonable amount of time after incurred for any reasonable legal and
any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 1.5 (a) shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld); and provided further, that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
an instrument duly executed by such Holder or underwriter specifically for use
therein.

                  (b)   Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and

                                       3
<PAGE>

partners and each person controlling such Holder, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Holder specifically for use therein; provided, however,
that the indemnity agreement contained in this subsection 1.5(b) shall not apply
to amounts paid in settlement of any such claim, loss, damage, liability or
action if such settlement is effected without the consent of the Holder, (which
consent shall not be unreasonably withheld); and provided further, that the
total amount for which any Holder shall be liable under this subsection 1.5(b)
shall not in any event exceed the aggregate proceeds received by such Holder
from the sale of Registrable Securities held by such Holder in such
registration.

                  (c)   Each party entitled to indemnification under this
subsection 1.5 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted in
prejudice to the Indemnifying Party; and provided further, that an Indemnified
Party (together with all other Indemnified Parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation.

            1.6   Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.

            1.7   Rule 144 Reporting. With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times to:

                  (a)   make and keep public information available, as those
terms are understood and defined in SEC Rule 144, after 90 days after the
effective date of the first registration filed by the Company for an offering of
its securities to the general public;

                                       4
<PAGE>

                  (b)   file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and

                  (c)   so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as the Holder may reasonably request in complying with any rule
or regulation of the SEC allowing the Holder to sell any such securities without
registration.

            1.8   Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2 and 1.7 may be assigned to a
transferee or assignee of a Holder's Registrable Securities not sold to the
public, provided, that the Company is given written notice by such Holder at the
time of or within a reasonable time after said transfer, stating the name and
address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned. The Company may
prohibit the transfer of any Holders' rights under this subsection 1.8 to any
proposed transferee or assignee who the Company reasonably believes is a
competitor of the Company.

      2.    General.

            2.1   Waivers and Amendments. With the written consent of the record
or beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all of
the Holders of the Registrable Securities. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing. This Agreement
or any provision hereof may be changed, waived, discharged or terminated only by
a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 2.1.

            2.2   Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.

            2.3   Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.

                                       5
<PAGE>

            2.4   Entire Agreement. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

            2.5   Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder's address as set forth below, or at
such other address as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at the Company's address set forth below, or
at such other address as the Company shall have furnished to the Holder in
writing.

            2.6   Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreement s shall not in any way be affected or impaired thereby.

            2.7   Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

            2.8   Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                                       6
<PAGE>

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

PURCHASER                                     COMPANY

SILICON VALLEY BANK                           SUPERCONDUCTOR
                                              TECHNOLOGIES INC.

By:____________________________               By:_______________________________

Name:__________________________               Name:_____________________________

Title:_________________________               Title:____________________________

Address:                                      Address:

3003 Tasman Drive                             460 Ward Drive
Santa Clara, CA 95054                         Santa Barbara, CA 93111-2310

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]