Document:

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                                                                   Exhibit 10.16

                              Second Amendment To
                       3-year Revolving Credit Agreement

     Second Amendment To 3-year Revolving Credit Agreement, Dated As Of March 5,
2001, Among Newport Corporation (Herein Referred To As The "Borrower") And ABN
AMRO BANK N.V. (herein referred to as the "Bank").

                             W i t n e s s e t h:

     Whereas, the Borrower and the Bank are parties to that certain 3-Year
Revolving Credit Agreement, as amended, dated as of October 29, 1999 (the
"Credit Agreement"); and

     Whereas, the Borrower has requested that the Credit Agreement be amended in
certain respects; and

     Whereas, the Borrower has requested, among other things, that the Bank
reduce the Commitment and extend the Termination Date; and

     Whereas, the Bank is willing to so amend the Credit Agreement, subject to
the terms and conditions hereinafter set forth;

     Now, Therefore, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
thereby, covenant and agree as follows:

     1.   General. All terms used herein which are not otherwise specifically
defined herein shall have the same meaning herein as defined in the Credit
Agreement as further amended hereby.

     2.   Revolving Credit. Section 1.1 of the Credit Agreement shall be hereby
amended by deleting the amount "$20,000,000" in line 8 thereof and substituting
in its place the amount of "$10,000,000" therefor.

     3.   Revolving Credit Loans. Section 1.2 of the Credit Agreement shall be
amended by deleting the amount "$20,000,000" in line 6 thereof and substituting
in its place the amount of "$10,000,000" therefor.

     4.   Definitions. Section 4.1 of the Credit Agreement shall be and is
hereby amended as follows:

               (a)  The definition of "EBITDA" shall be amended and
            restated in its entirety as follows:

            "EBITDA" means, with reference to any period, Net Income
            for such period plus all amounts deducted in arriving at
            such Net Income amount in respect of (a) Interest Expense
            for such period,
<PAGE>

            plus (b) federal, state and local income taxes for such
            period, plus (c) all amounts properly charged for
            depreciation of fixed assets and amortization of
            intangible assets during such period on the books of the
            Borrower and its Subsidiaries; provided, however, that
            notwithstanding anything in this definition to the
            contrary: (a) any gains on sales or other dispositions of
            assets of the Company and its Subsidiaries outside the
            ordinary course of their business shall be given no effect
            in determining EBITDA; and (b) interest income as
            determined according to GAAP shall be given no effect in
            determining EBITDA.

               (b)  The definition of "Termination Date" shall be
            amended and restated in its entirety as follows:

            "Termination Date" means March 5, 2004, or such earlier
            date on which the Commitment is terminated in whole
            pursuant to Section 3.3, 8.2 or 8.3.

               (c)  A new definition of "Total Funded Debt" shall be
            inserted in the appropriate alphabetical order as follows:

            "Total Funded Debt" means, at any time the same is to be
            determined, the aggregate of all Indebtedness for Borrowed
            Money of the Borrower and its Subsidiaries at such time,
            plus all Indebtedness for Borrowed Money of any other
            Person which is directly or indirectly guaranteed by the
            Borrower or any of its Subsidiaries or which the Borrower
            or any of its Subsidiaries has agreed (contingently or
            otherwise) to purchase or otherwise acquire or in respect
            of which the Borrower or any of its Subsidiaries has
            otherwise assured a creditor against loss, plus
            obligations of the Borrower and its Subsidiaries as less
            under capital leases (in accordance with GAAP).

               (d)  The definition "Total Liabilities" shall be
            deleted in its entirety.

        5.  Leverage Ratio. Section 7.8 of the Credit Agreement shall be amended
and restated in its entirety as follows:

               Section 7.8.  Leverage Ratio. The Company will at all
            times maintain a ratio of Total Funded Debt to EBITDA (the
            "Leverage Ratio") of not more than 2.0 to 1.00.

        6.  Tangible Net Worth. Section 7.9 of the Credit Agreement shall be
amended and restated in its entirety as follows:

                                      -2-
<PAGE>

               Section 7.9.  Tangible Net Worth. The Company will at
            all times maintain Tangible Net Worth at not less than the
            sum of $324,929,000 plus, on a cumulative basis, 75% of
            positive Net Income for each fiscal quarter end subsequent
            to the fiscal quarter ended December 31, 2000 plus, at the
            time of offering, 75% of Equity Offerings issued after the
            date of this Agreement.

        7.  Capital Expenditures. Section 7.12 of the Credit Agreement shall be
amended and restated in its entirety as follows:

               Section 7.12. Capital Expenditures. The Company will
            not, nor will it permit any Subsidiary to, expend or
            become obligated for capital expenditures (as determined
            in accordance with GAAP) in an aggregate amount in excess
            of $29,000,000 during any fiscal year of the Company.

        8.  Acquisitions. Subsection (g) of Section 7.15 of the Credit Agreement
shall be amended and restated in its entirety as follows:

               (g)  Acquisitions by the Company of substantially all
            of the assets of corporations or Acquisitions of Wholly-
            Owned Domestic Restricted Subsidiaries from and after the
            date hereof so long as (i) the aggregate amount of cash
            consideration payable in connection with such Acquisitions
            does not exceed $12,000,000, (ii) the aggregate amount of
            stock consideration payable in connection with such
            Acquisitions does not exceed $18,000,000, (iii) the
            Acquisition of a Domestic Restricted Subsidiary shall have
            been approved by the board of directors of such Person
            prior to such Acquisition, (iv) such acquired Domestic
            Restricted Subsidiary shall have complied with the
            provisions of Section 7.23 hereof and (v) prior to such
            Acquisition, Company shall deliver a written certificate
            in form acceptable to the Bank signed by the President or
            chief financial officer of the Company to the effect that
            to the best of such officer's knowledge and belief no
            Default or Event of Default has occurred or is continuing
            as a result of such Acquisition on a pro forma basis;

        9.  Revolving Note. The Note executed by the Company in favor of Bank in
the form attached as Exhibit A to the Credit Agreement shall be amended and
restated in its entirety by the note executed by the Company in favor of the
Bank of even date herewith in the form of Exhibit A attached hereto. The Bank
shall mark such prior Note as "Cancelled" and return the same to the Company
found in Exhibit A to the Credit Agreement shall be amended and restated in its
entirety by replacing such with Exhibit A attached hereto.

                                      -3-
<PAGE>

       10.   Compliance Certificate. The Compliance Certificate found in Exhibit
B to the Credit Agreement shall be amended and restated in its entirety by
replacing such with Exhibit B attached hereto.

       11.  Representations. In order to induce the Bank to execute and deliver
this Amendment, the Borrower hereby represents to the Bank that as of the date
hereof the representations and warranties set forth in Section 5 of the Credit
Agreement are and shall be and remain true and correct (except that the
representations contained in Section 5.5 shall be deemed to refer to the most
recent financial statements of the Borrower delivered to the Bank) and the
Borrower is in compliance with the terms and conditions of the Credit Agreement
and no Default or Event of Default has occurred and is continuing under the
Credit Agreement or shall result after giving effect to this Amendment.

       12.  Effectiveness. This Amendment shall become effective (i) when it
shall be executed by the Borrower and the Bank, (ii) the Borrower shall have
executed and delivered a new Note to the Bank as identified in Exhibit A hereto,
(iii) the Bank has received certified copies of the resolutions of the Board of
Directors of the Borrower approving the increase and extension described herein,
(iv) the Bank shall have received copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in connection with the
execution and delivery of this Amendment to the extent the Bank or its counsel
may reasonably request. This Amendment may be executed in separate counterparts,
all of which taken together shall constitute one and the same instrument. This
agreement shall be construed and determined in accordance with the laws of the
State of California. Except as herein specifically amended, the Credit Agreement
shall be and remain in full force and effect and wherever reference is made in
any note, document, letter or other communication to the Credit Agreement, such
reference shall, without more, be deemed to refer to the Credit Agreement as
amended hereby.

                 [Remainder of Page Intentionally Left Blank]

                                      -4-
<PAGE>

        In Witness Whereof, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Agreement as of the date first
above written.

                                               Newport Corporation, as Borrower

                                               By
                                                  Title:

                                               ABN AMRO Bank N.V., as Bank

                                               By
                                                  Title:

                                               By
                                                  Title:

                                      -5-
<PAGE>

                                   EXHIBIT A

                              NEWPORT CORPORATION

                             REVOLVING CREDIT NOTE

$10,000,000                                                        March 5, 2001

        On the Termination Date, for value received, the undersigned, Newport
Corporation, a Nevada corporation (the "Company"), hereby promises to pay to the
order of ABN AMRO BANK N.V. (the "Bank") at its office at 300 South Grand
Avenue, Los Angeles, California, the principal sum of (i) TEN MILLION and no/100
DOLLARS ($10,000,000), or (ii) such lesser amount as may at the time of the
maturity hereof, whether by acceleration or otherwise, be the aggregate unpaid
principal amount of all Loans owing from the Company to the Bank under the
Revolving Credit provided for in the Credit Agreement hereinafter mentioned.

        This Note evidences Loans made and to be made to the Company by the Bank
under the Revolving Credit provided for under that certain 3-Year Revolving
Credit Agreement, as amended, dated as of October 29, 1999 between the Company
and the Bank (said Credit Agreement, as the same may be amended, modified or
restated from time to time, being referred to herein as the "Credit Agreement"),
and the Company hereby promises to pay interest at the office described above on
such Loans evidenced hereby at the rates and at the times and in the manner
specified therefor in the Credit Agreement.

        Each Loan made under the Revolving Credit against this Note, any
repayment of principal hereon, the status of each such Loan from time to time as
part of the Domestic Rate Portion or a LIBOR Portion and, in the case of any
Fixed Rate Portion, the interest rate and Interest Period applicable thereto
shall be endorsed by the holder hereof on a schedule to this Note or recorded on
the books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Company agrees that in any action or proceeding instituted to collect or enforce
collection of this Note, the entries endorsed on a schedule to this Note or
recorded on the books and records of the holder hereof shall be prima facie
evidence of the unpaid principal balance of this Note, the status of each Loan
from time to time as part of the Domestic Rate Portion or a LIBOR Portion and,
in the case of any Fixed Rate Portion, the interest rate and Interest Period
applicable thereto.

        This Note is issued by the Company under the terms and provisions of the
Credit Agreement and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
<PAGE>

        The Company hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral therefor. The Company hereby
waives presentment for payment and demand. This Note shall be construed in
accordance with, and governed by, the internal laws of the State of California
without regard to principles of conflicts of laws.

                                               Newport Corporation

                                               By:____________________________
                                               Name:__________________________
                                               Its:___________________________

                                      -2-
<PAGE>

                                   Exhibit B

                            Compliance Certificate

     This Compliance Certificate is furnished to ABN AMRO Bank N.V. (the "Bank")
pursuant to that certain 3-Year Revolving Credit Agreement, as amended, dated as
of October 29, 1999, by and between Newport Corporation (the "Company") and the
Bank (the "Credit Agreement"). Unless otherwise defined herein, the terms used
in this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.

     The Undersigned hereby certifies that:

          1.   I am the duly elected _____________________________________ of
     the Company;

          2.   I have reviewed the terms of the Credit Agreement and I have
     made, or have caused to be made under my supervision, a detailed review of
     the transactions and conditions of the Company and its Subsidiaries during
     the accounting period covered by the attached financial statements;

          3.   The examinations described in paragraph 2 did not disclose, and I
     have no knowledge of, the existence of any condition or the occurrence of
     any event which constitutes a Default or Event of Default during or at the
     end of the accounting period covered by the attached financial statements
     or as of the date of this Certificate, except as set forth below;

          4.   The financial statements required by Section 7.5 of the Credit
     Agreement and being furnished to you concurrently with this certificate
     are, to the best of my knowledge, true, correct and complete as of the
     dates and for the periods covered thereby; and

          5.   The Attachment hereto sets forth financial data and computations
     evidencing the Company's compliance with certain covenants of the Credit
     Agreement, all of which data and computations are, to the best of my
     knowledge, true, complete and correct and have been made in accordance with
     the relevant Sections of the Credit Agreement.

     Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existing and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>

        The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of
____________, 20__.

                                               Newport Corporation

                                               By

                                                  Its:_________________________

                                      -2-
<PAGE>

                     Attachment to Compliance Certificate
                              Newport Corporation

                 Compliance Calculations for Credit Agreement
                         Dated as of October 29, 1999
                     Calculations as of ____________, 20__

================================================================================

A.   Quick Ratio (Section 7.7)
     -------------------------

     1.   Current assets                                           $___________
                                                                      A1

     2.   Inventory                                                $___________
                                                                      A2

     3.   Line A1 minus Line A2                                    $___________
                                                                      A3

     4.   Current liabilities (excluding Loans)                    $___________
                                                                      A4

     5.   Ratio of Line A3 to Line A4                              ______:  1.0

     6.   Line A5 ratio must not be less than                         1.0: 1.0

          Company in compliance?                                      yes/no

B.   Tangible Net Worth (Section 7.9)
     --------------------------------

     1.   Total shareholder's equity                               $___________
                                                                      B1

     2.   Sum of:

          (i)  intangibles        $__________
                                                                   $-----------
          (ii) write-up of assets  $__________                        B2

     3.   Line B1 minus Line B2                                       $========
          (Tangible Net Worth)                                        B3

     4.   Line B3 must be greater than or equal to                 $___________

          Company in compliance?                                      yes/no
<PAGE>

C.   Leverage Ratio (Section 7.8)
     ----------------------------

     1.   Total Funded Debt                                        $___________
                                                                      C1

     2.   Net Income for past 4 quarters                           $___________
                                                                      C2

     3.   Interest Expense for past 4 quarters                     $___________
                                                                      C3

     4.   Federal, state and local income                          $___________
          taxes for past 4 quarters                                   C4

     5.   Depreciation and amortization for                        $___________
          past 4 quarters                                             C5

     6.   Interest income for past 4 quarters                      $___________
                                                                      C6

     7.   Extraordinary gains.                                     $___________
                                                                      C7

     8.   Sum of Lines C2, C3, C4 and C5 less sum of Lines C6         $========
          and C7 (EBITDA)                                             C8

     9.   Ratio of Line C1 to Line C8                              ______:  1.0

     10.  Line C9 ratio must not be greater than                      2.0: 1.0

          Company in compliance?                                      yes/no

D.   Interest Coverage Ratio (Section 7.11)
     --------------------------------------
                                                                      $========
     1.   EBITDA (Line C8 above)                                      D1

                                                                      $========
     2.   Interest expense (Line C3 above)                            D2

                                                                   ______:  1.0

     3.   Ratio of Line D1 to Line D2

     4.   Line D3 ratio must not be less than                         3.5: 1.0

          Company in compliance?                                      yes/no

                                      -2-
<PAGE>

E.   Net Income (Section 7.10)
     -------------------------

     1.   Net Income for past quarter                              $___________
                                                                      E1

     2.   Net Income for fiscal quarter preceding                  $___________
          Line E1 quarter                                             E2

     3.   10% of Tangible Net Worth (Line B3 above)                $___________
                                                                      E3

     4.   Line E1 amount must not exceed Line E3

     5.   Line E2 amount must exceed $0

          Company in compliance                                       yes/no

F.   Capital Expenditures (Section 7.12)
     -----------------------------------

     1.   Capital expenditures fiscal year to date                 $___________
                                                                      F1

     2.   Line F1 amount must not exceed $29,000,000

          Company in compliance?                                      yes/no

                                      -3-<PAGE>

                                                                    EXHIBIT 10.3

                             AMENDED AND RESTATED

                       1990 INCENTIVE AND NON-INCENTIVE

                               STOCK OPTION PLAN

                                      OF
                           NEXELL THERAPEUTICS INC.
                  (FORMERLY NAMED VIMRx PHARMACEUTICALS INC.)

       (AS AMENDED THROUGH DECEMBER 31, 2000 AND AS ADJUSTED TO REFLECT
                THE JUNE 15, 2000 1 FOR 4 REVERSE STOCK SPLIT)

1.   Purpose of Plan.

The purpose of this Incentive and Non-Incentive Stock Option Plan ("Plan") is to
further the growth and development of VIMRx Pharmaceuticals Inc. ("Company") and
any subsidiaries thereof by encouraging selected employees, directors and other
persons who contribute and are expected to contribute materially to the
Company's success to obtain a proprietary interest in the Company through the
ownership of stock, thereby providing such persons with an added incentive to
promote the best interests of the Company and affording the Company a means of
attracting to its service persons of outstanding ability.

2.   Stock Subject to the Plan.

An aggregate of 600,000 shares of the Company's Common Stock, $.001 par value
("Common Stock") subject, however, to adjustment or change pursuant to paragraph
12 hereof, shall be reserved for issuance upon the exercise of options which may
be granted from time to time in accordance with the Plan ("Options"). Such
shares may be, in whole or in part, authorized but unissued shares or issued
shares which have been reacquired by the Company. If, for any reason, an Option
shall lapse, expire or terminate without having been exercised in full, the
unpurchased shares covered thereby shall again be available for purposes of the
Plan.

3.   Administration.

                    (a) Except as provided in paragraph (c) below, the Plan
                    shall be administered by the Committee. The Board of
                    Directors shall appoint the Committee from among its
                    members. Such Committee shall be composed of two or more
                    Directors who, to the extent practicable, shall be "outside
                    directors" as defined in regulations under Section 162(m) of
                    the Internal Revenue Code of 1986, as amended (the "Code"),
                    and "non-employee directors" as defined by Regulation
                    240.16b-3 under the Securities Exchange Act of 1934, as
                    amended. Such Committee shall have and may exercise any and
                    all of the powers relating to the administration of the Plan
                    and the grant of Options thereunder as are set forth in
                    subparagraph 3(b) hereof as the Board of Directors shall
                    confer and delegate. The Board of Directors shall have power
                    at any time to fill vacancies in, to change the membership
                    of, or to discharge such Committee. The Committee shall
                    select one of its members as its chairman and shall hold its
                    meetings at such time and at such places as it shall deem
                    advisable. A majority of such Committee shall constitute a
                    quorum and such majority shall determine its action. Any
                    action may be taken without a meeting by written consent of
                    all the members of the Committee. The Committee shall keep
                    minutes of its proceedings and shall report the same to the
                    Board of Directors at the meeting next succeeding.

                    (b) The Committee shall administer the Plan and, subject to
                    the provisions of the Plan, shall have sole authority in its
                    discretion to determine the persons to whom, and the time or
                    times at which, Options shall be granted; the number of
                    shares to be subject to each such Option; the provisions
                    regarding exercisability of each Option; the expiration date
                    of each Option; whether the Option shall contain a "cashless
                    exercise" provision; whether all or any portion of the
                    Options shall be incentive stock options ("Incentive
                    Options") qualifying under Section 422A of the Code or stock
                    options which do not so qualify ("Non-Incentive Options");
                    whether a Non-Incentive Option shall have limited
                    transferability as permitted under the Plan; and whether a
                    Non-Incentive Option granted to a non-employee shall
                    terminate following the non-employee's termination of
                    engagement in performing services for the Company or its
                    subsidiaries pursuant to Section 9 of the Plan. Both
                    Incentive Options and Non-Incentive Options may be granted
                    to the same person at the same time provided each type of
                    Option is clearly designated. In making such determinations,
                    the Committee may take into account the nature of the
                    services rendered by such persons, their present and
                    potential contribution to the Company's success and such
                    other factors as the Committee in its sole discretion may
                    deem relevant. Subject to the express provisions of the
                    Plan, the Committee shall also have authority to interpret
                    the Plan; to prescribe, amend

                                       1
<PAGE>

                    and rescind rules and regulations relating thereto; to
                    determine the terms and provisions of the respective Option
                    Agreements, which shall be substantially in the forms
                    attached hereto as Exhibit A and Exhibit B; to amend the
                    provisions of outstanding Options to provide for accelerated
                    exercisability or the extension of the expiration date of
                    such Options; and to make all other determinations necessary
                    or advisable for the administration of the Plan, all of
                    which determinations shall be conclusive and not subject to
                    review.

                    (c) The Board of Directors may administer the Plan, in lieu
                    of and with the same powers as the Committee, with respect
                    to any Options granted or to be granted under the Plan,
                    provided that such administration is consistent with the
                    provisions of Section 162(m) of the Code.

4.   Eligibility for Receipt of Options.

                    (a) Incentive Options. Incentive Options may be granted only
                    to employees (including officers) of the Company and/or any
                    of its subsidiaries. A director of the Company or any
                    subsidiary who is not an employee of the Company or of one
                    of its subsidiaries is not eligible to receive Incentive
                    Options under the Plan. Further, Incentive Options may not
                    be granted to any person who, at the time the Incentive
                    Option is granted, owns (or is considered as owning within
                    the meaning of Section 425(d) of the Code) stock possessing
                    more than 10% of the total combined voting power of all
                    classes of stock of the Company or any subsidiary (10%
                    Owner), unless at the time the Incentive Option is granted
                    to the 10% Owner, the option price is at least 110% of the
                    fair market value of the Common Stock subject thereto and
                    such Incentive Option by its terms is not exercisable
                    subsequent to five years from the date of grant. The
                    aggregate fair market value (determined as of the time an
                    Incentive Option is granted) of the shares of the Company's
                    Common Stock initially purchasable upon exercise of an
                    Incentive Option during any calendar year may not exceed
                    $100,000.

                    (b) Non-Incentive Options. Non-Incentive Options may be
                    granted to any employees (including employees who have been
                    granted Incentive Options), directors, consultants, agents,
                    independent contractors and other persons whom the Board of
                    Directors (or Committee) determines will contribute to the
                    Company's success.

                    (c) The maximum number of shares that may be subject to
                    options under this Plan granted during any calendar year to
                    any executive officer of the Company is 200,000 shares.

                    (d) In the event on outstanding Incentive Option or a
                    portion thereof no longer qualifies as an incentive stock
                    option under Section 422A of the Code, such Option or
                    portion thereof, as applicable, thereafter shall be deemed a
                    Non-Incentive Option under the Plan.

5.   Option Price.

The purchase price of the shares of Common Stock under each Option shall be
determined by the Committee, which determination shall be conclusive and not
subject to review, but in no event shall the purchase price be less than 100% of
the fair market value of the Common Stock on the date of grant in the case of
Incentive Options (110% of fair market value in the case of Incentive Options
granted to a 10% Owner) and 50% of the fair market value of the Common Stock on
the date of the grant in the case of Non-Incentive Options.

For purposes of the Plan, unless the Committee determines otherwise, the "fair
market value" of a share of Common Stock as of a certain date shall be the
closing sale price of the Common Stock on The Nasdaq Stock Market or, if the
Common Stock is not then traded on The Nasdaq Stock Market, such national
securities exchange on which the Common Stock is then traded, on the trading
date immediately preceding the date fair market value is being determined. The
Committee may make such other determination of fair market value, based on other
factors, as it shall deem appropriate.

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

6.   Term of Options.

The term of each Option shall be such number of years as the Committee shall
determine, subject to earlier  termination as herein provided, but in no event
more than ten years from the date such Option is granted.

7.       Exercise of Options.

                                       2
<PAGE>

                    (a) Each Option shall be exercisable to the extent
                    determined by the Committee, but in no event shall an Option
                    be exercisable until at least six months from the date of
                    grant, except as otherwise provided in paragraph 13 herein.

                    (b) An Option may not be exercised for fractional shares of
                    the Company's Common Stock.

                    (c) Except as provided in paragraphs 9, 10 and 11 hereof,
                    and unless determined otherwise by the Committee with
                    respect to Non-Incentive Options granted to non-employees,
                    no Option shall be exercisable unless the holder thereof
                    shall have been an employee, director, consultant, agent,
                    independent contractor or other person employed by or
                    engaged in performing services for the Company and/or a
                    subsidiary continuously from the date of grant to the date
                    of exercise.

                    (d) The exercise of an Option shall be contingent upon
                    receipt from the holder thereof of a written representation
                    that at the time of such exercise it is the optionee's then
                    present intention to acquire the Option shares for
                    investment and not with a view to the distribution or resale
                    thereof (unless a Registration Statement covering the shares
                    purchasable upon exercise of the Options shall have been
                    declared effective by the Securities and Exchange
                    Commission) and upon receipt by the Company of cash, or a
                    check to its order, for the full purchase price of such
                    shares. The Committee may, in its discretion, include a
                    "cashless exercise" provision in the applicable Option
                    Agreement, in which event the optionee will be permitted (i)
                    to deliver previously owned shares of Common Stock with a
                    fair market value equal to the exercise price in payment of
                    the full purchase price of such shares, or (ii) to request
                    that the Company withhold shares of Common Stock issuable
                    upon exercise of such Option with a fair market value equal
                    to the exercise price of the shares being purchased under
                    the Option (thereby reducing the number of shares issuable
                    upon exercise of the Option).

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

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

8.   Transferability of Options.

No Option granted pursuant to the Plan shall be transferable otherwise than by
will or the laws of descent or distribution and an Option may be exercised
during the lifetime of the holder only by such holder, provided, however, that
the Committee may provide for transferability of a Non-Incentive Option to an
optionee's family members or family trusts.

9.   Termination of Employment or Engagement.

                    (a) Except as provided in paragraph (b) below, in the event
                    the employment of the holder of an Option shall be
                    terminated by the Company or a subsidiary for any reason
                    other than by reason of death or disability, or the
                    engagement of a non-employee holder of a Non-Incentive
                    Option shall be terminated by the Company or a subsidiary
                    for any reason, such holder may, within three months from
                    the date of such termination, exercise such Option to the
                    extent such Option was exercisable by such holder at the
                    date of such termination. Notwithstanding the foregoing, no
                    Option may be exercised subsequent to the date of its
                    expiration. Absence on leave approved by the employer
                    corporation shall not be considered an interruption of
                    employment for any purpose under the Plan. In addition, at
                    the discretion of the Committee, the exercisability of an
                    outstanding Non-Incentive Option may be extended to a date
                    determined by the Committee but not beyond ten years from
                    the date of grant.

                    (b) The Committee may, in its discretion, at the time of
                    grant or by amending the applicable outstanding Non-
                    Incentive Option, delete the foregoing termination provision
                    with respect to a Non-Incentive Option granted to a non-
                    employee of the Company or its subsidiaries.

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

10.  Disability of Holder of Option.

                                       3
<PAGE>

If the employment of the holder of an Option shall be terminated by reason of
such holder's disability, such holder may, within twelve months from the date of
such termination, exercise such option to the extent such Option was exercisable
by such holder at the date of such termination. Notwithstanding the foregoing,
no Option may be exercised subsequent to the date of its expiration.

11.  Death of Holder of Option.

If the holder of any Option shall die while in the employ of, or while
performing services for, the Company or one or more of its subsidiaries (or
within six months following termination of employment due to disability), the
Option theretofore granted to such person may be exercised, but only to the
extent such Option was exercisable by the holder at the date of death (or, with
respect to employees, the date of termination of employment due to disability)
by the legatee or legatees of such person under such person's Last Will, or by
such person's personal representative or distributees, within twelve months from
the date of death but in no event subsequent to the expiration date of the
Option.

12.  Adjustments Upon Changes in Capitalization.

If at any time after the date of grant of an Option, the Company shall by stock
dividend, split-up, combination, reclassification or exchange, or through merger
or consolidation or otherwise, change its shares of Common Stock into a
different number or kind or class of shares or other securities or property,
then the number of shares covered by such Option and the price per share thereof
shall be proportionately adjusted for any such change by the Committee whose
determination thereon shall be conclusive.

13.  Acceleration of Exercisability Upon Change in Control.

Upon the occurrence of a "change in control" of the Company (as defined below),
all outstanding Options shall become immediately fully exercisable. For purposes
of the Plan, a "change in control" of the Company shall mean (i) the acquisition
at any time by a "person" or "group" (as such terms are used Sections 13(d) and
14(d)(2) of the Exchange Act of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities representing 50%
or more of the combined voting power in the election of directors of the then
outstanding securities of the Company or any successor or the Company; (ii) the
termination of service of directors, for any reason other than death, disability
or retirement from the Board of Directors, during any period of two consecutive
years or less, of individuals who at the beginning of such period constituted a
majority of the Board of Directors, unless the election of or nomination for
election of each new director during such period was approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of the period; (iii) approval by the stockholders of the Company of
any merger, consolidation, or statutory share exchange as a result of which the
Common Stock shall be changed, converted or exchanged (other than a merger,
consolidation or share exchange with a wholly-owned Subsidiary) or liquidation
of the Company or any sale or disposition of 80% or more of the assets or
earning power or the Company; or (iv) approval by the stockholders of the
Company of any merger, consolidation, or statutory share exchange to which the
Company is a party as a result of which the persons who were stockholders
immediately prior to the effective date of the merger, consolidation or share
exchange shall have beneficial ownership of less than 50% of the combined voting
power in the election of directors of the surviving corporation; provided,
however, that no change in control shall be deemed to have occurred if, prior to
such time as a change in control would otherwise be deemed to have occurred, the
Company's Board of Directors deems otherwise.

14.  Vesting of Rights Under Options.

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

15.  Withholding Taxes.

Whenever under the Plan shares are to be issued in satisfaction of the exercise
of Options granted thereunder, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy federal, state
and local withholding tax requirements prior to the delivery of any certificate
or certificates for such shares.

16.  Termination and Amendment.

The Plan, which was adopted by the Board of Directors on July 10, 1990 and
approved by the shareholders of the Company, shall terminate on July 9, 2000 and
no Option shall be granted under the Plan after such date. The Board of
Directors may at any

                                       4
<PAGE>

time prior to such date terminate the Plan or make such modifications or
amendments thereto as it shall deem advisable, provided, however, that
shareholder approval shall be required:

          (i)   to increase the number of shares reserved for issuance under the
          Plan;

          (ii)  to materially increase the benefits accruing to participants
          under the Plan;

          (iii) to materially modify the requirements of eligibility for
          participation in the Plan; or

          (iv)  if otherwise required to comply with the incentive stock option
          provisions of Section 162(m) of the Code or the listed company
          requirements of The Nasdaq Stock Market or of a national securities
          exchange on which the Common Stock is then traded,

and, provided, further, that no modification or amendment shall adversely affect
the rights of a holder of an Option previously granted under the Plan without
such holder's written consent.

                                       5

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