Document:

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                                                                    EXHIBIT 10.1

                            Cell Therapeutics, Inc.

                 5.75% Convertible Subordinated Notes due 2008

                         Registration Rights Agreement
                         -----------------------------

                                                                   June 13, 2001

CIBC World Markets Corp.
Banc of America Securities LLC
U.S. Bancorp Piper Jaffray Inc.
c/o CIBC World Markets Corp.
One World Financial Center
New York, New York  10281

Ladies and Gentlemen:

     Cell Therapeutics, Inc., a Washington corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its 5.75% Convertible Subordinated
Notes due 2008 (the "Securities"). As an inducement to the Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers
for the benefit of holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:

     1.   Definitions.

          (a)  Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:

     "Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.

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     "Commission" means the United States Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.

     "Common Stock" means the Company's common stock, no par value per share.

     "DTC" means The Depository Trust Company.

     "Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.

     "Effective Time" means the date on which the Commission declares the Shelf
Registration Statement effective or on which the Shelf Registration Statement
otherwise becomes effective.

     "Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.

     "Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.

     The term "holder" means, when used with respect to any Security, the Holder
(as defined in the Indenture) and, with respect to any Common Stock, the record
holder of such Common Stock.

     "Indenture" means the Indenture, dated as of June 13, 2001, between the
Company and State Street Bank and Trust Company of California, N.A., as amended
and supplemented from time to time in accordance with its terms.

     "Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 7 hereof.

     "NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.

     "Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire, substantially in the form of Exhibit A
attached hereto, relating to the Securities.

     The term "person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

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

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and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

     "Purchase Agreement" means the Purchase Agreement, dated as of June 7,
2001, between the Company and the Purchasers.

     "Purchasers" means the Purchasers named in Schedule A to the Purchase
Agreement.

     "Registrable Securities" means all or any portion of the Securities issued
from time to time under the Indenture and the shares of Common Stock issuable
upon conversion of such Securities; provided, however, that a security ceases to
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be a Registrable Security when it is no longer a Restricted Security.

     "Restricted Security" means any Security or share of Common Stock issuable
upon conversion thereof except any such Security or share of Common Stock that
(i) has been registered pursuant to an effective registration statement under
the Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii)
has otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 2.6 of the Indenture.

     "Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

     "Securities Act" means the United States Securities Act of 1933, as
amended.

     "Shelf Registration" means a registration effected pursuant to Section 2
hereof.

     "Shelf Registration Statement" means a "shelf" registration statement filed
under the Securities Act providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable Securities
pursuant to Rule 415 under the Securities Act and/or any similar rule that may
be adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.

     The term "underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.

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          (b)  Wherever there is a reference in this Agreement to a percentage
of the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, Common Stock shall be treated as representing the
principal amount of Securities which was surrendered for conversion or exchange
in order to receive such number of shares of Common Stock.

     2.   Shelf Registration.

          (a)  The Company shall, on or prior to 90 calendar days after the
Closing Date (as defined in the Purchase Agreement), file with the Commission a
Shelf Registration Statement relating to the offer and sale of the Registrable
Securities and, thereafter, shall use all reasonable efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act on or
prior to 180 calendar days after the Closing Date; provided, however, that no
holder shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus for resales of Registrable
Securities unless such holder is an Electing Holder.

          (b)  The Company shall use all reasonable efforts:

               (i)   to keep the Shelf Registration Statement continuously
     effective in order to permit the Prospectus to be usable by holders for
     resales of Registrable Securities until the earlier of (A) the sale under
     the shelf Registration Statement of all the Registrable Securities
     registered thereunder and (B) the expiration of the holding period
     applicable to such Registrable Securities held by persons that are not
     affiliates of the Company under Rule 144(k) of the Securities Act or any
     successor previously subject to specific permitted exceptions (such period
     being referred to herein as the "Effectiveness Period");

               (ii)  after the Effective Time, promptly upon the request of any
     holder of Registrable Securities that is not then an Electing Holder, to
     take any action reasonably necessary to enable such holder to use the
     Prospectus for resales of Registrable Securities, including without
     limitation any action necessary to identify such holder as a selling
     securityholder in the Shelf Registration Statement; provided, however, that
     nothing in this subparagraph shall relieve such holder of the obligation to
     return a completed and signed Notice and Questionnaire to the Company in
     accordance with Section 3(a) (ii) hereof; and

               (iii) if at any time the Securities are convertible into
     securities other than Common Stock pursuant to Article Ten of the
     Indenture, the Company shall, or shall cause any successor under the
     Indenture to, cause such securities to be included in the Shelf
     Registration Statement no later than the date on which the Securities may
     then be convertible into such securities.

     3.   Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:

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          (a)  (i)   Not less than 30 calendar days prior to the Effective Time,
     the Company shall mail the Notice and Questionnaire to the holders of
     Registrable Securities. No holder shall be entitled to be named as a
     selling securityholder in the Shelf Registration Statement as of the
     Effective Time, and no holder shall be entitled to use the Prospectus for
     resales of Registrable Securities at any time unless such holder has
     returned a completed and signed Notice and Questionnaire to the Company by
     the deadline for response set forth therein; provided, however, holders of
     Registrable Securities shall have at least 20 calendar days from the date
     on which the Notice and Questionnaire is first mailed to such holders to
     return a completed and signed Notice and Questionnaire to the Company.

               (ii)  After the Effective Time, the Company shall, upon the
     request of any holder of Registrable Securities that is not then an
     Electing Holder, promptly send a Notice and Questionnaire to such holder.
     The Company shall not be required to take any action to name such holder as
     a selling securityholder in the Shelf Registration Statement or to enable
     such holder to use the Prospectus for resales of Registrable Securities
     until such holder has returned a completed and signed Notice and
     Questionnaire to the Company.

               (iii) The term "Electing Holder" shall mean any holder of
     Registrable Securities that has returned a completed and signed Notice and
     Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii)
     hereof.

          (b)  The Company shall furnish to each Electing Holder, counsel to the
Electing Holders, and the Managing Underwriters, if any, no fewer than five
Business Days prior to the initial filing of the Shelf Registration Statement, a
copy of such Shelf Registration Statement, and shall furnish to such holders,
counsel to such holders, and the Managing Underwriters, if any, no fewer than
two Business Days prior to the filing of any amendment or supplement to the
Prospectus, a copy of such amendment or supplement and shall use all reasonable
efforts to reflect in each such document when so filed with the Commission such
comments as such holders and their respective counsel reasonably may propose;
provided, however, that the Company shall make the final decision as to the form
and content of each such document. If any such Shelf Registration Statement
refers to any Electing Holder by name or otherwise as the holder of any
securities of the Company, then such Electing Holder shall have the right to
require (i) the insertion therein of language, in form and substance reasonably
satisfactory to such Electing Holder, to the effect that the holding by such
Electing Holder of such securities is not to be construed as a recommendation by
such Electing Holder of the investment quality of the Company's securities
covered thereby and that such holding does not imply that such Electing Holder
will assist in meeting any future financial requirements of the Company or (ii)
in the event that such reference to such Electing Holder by name or otherwise is
not required by the Securities Act or any similar Federal statute then in force,
the deletion of the reference to such Electing Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.

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          (c)  From the date hereof until the end of the Effective Period, the
Company shall (subject to paragraph (j) below) promptly take such action as may
be necessary so that (i) each of the Shelf Registration Statement and any
amendment thereto and the Prospectus and any amendment or supplement thereto
(and each report or other document incorporated by reference therein in each
case) complies in all material respects with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (iii) each of the Prospectus and any amendment or supplement to
the Prospectus does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

          (d)  The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such holder (which notice
pursuant to clauses (ii) through (iv) hereof shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made):

               (i)   when the Shelf Registration Statement and any amendment
     thereto has been filed with the Commission and when the Shelf Registration
     Statement or any post-effective amendment thereto has become effective;

               (ii)  of the issuance by the Commission of any stop order
     suspending the effectiveness of the Shelf Registration Statement or the
     initiation of any proceedings for such purpose;

               (iii) of the receipt by the Company of any notification with
     respect to the suspension of the qualification of the securities included
     in the Shelf Registration Statement for sale in any jurisdiction or the
     initiation of any proceeding for such purpose; and

               (iv)  if changes in the Shelf Registration Statement or the
     Prospectus are required in order that the Shelf Registration Statement and
     Prospectus do not contain an untrue statement of a material fact and do not
     omit to state a material fact required to be stated therein or necessary to
     make the statements therein (in the case of the Prospectus, in light of the
     circumstances under which they were made) not misleading.

          (e)  The Company shall use all reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.

          (f)  The Company shall furnish to each requesting Electing Holder,
without charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such holder so requests in writing,

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all reports, other documents and exhibits that are filed with or incorporated by
reference in the Shelf Registration Statement.

          (g)  The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) and any amendment or supplement thereto
as such Electing Holder may reasonably request; and the Company consents (except
during the continuance of any event described in Section 3(d)(iv) above) to the
use of the Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supplement thereto
during the Effectiveness Period.

          (h)  Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and a single counsel for the Electing
Holders in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws of such
jurisdictions within the United States as any Electing Holder may reasonably
request, (ii) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Electing Holder or
underwriter, if any, to complete its distribution of Registrable Securities
pursuant to the Shelf Registration Statement, and (iii) take any and all other
actions necessary or advisable to enable the disposition in such jurisdictions
of such Registrable Securities; provided, however, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.

          (i)  The Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf Registration Statement,
which certificates shall not bear any restrictive legends and, if so required by
any securities exchange upon which any Registrable Securities are listed, shall
be penned, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders, and which certificates shall be free of any
restrictive legends and in such permitted denominations and registered in such
names as Electing Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.

          (j)  Upon the occurrence of any fact or event contemplated by
paragraph 3(d)(iv) above, the Company shall (subject to the next sentence)
promptly prepare a post-effective amendment or supplement to the Shelf
Registration Statement or the Prospectus, or any document incorporated therein
by reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If the Company
notifies the Electing Holders in accordance with clauses (ii) through

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(iv) of paragraph 3(d) above to suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made, then each Electing Holder
shall suspend the use of the Prospectus and keep the notification provided
pursuant to paragraph 3(d) above confidential until (i) such Electing Holder has
received copies of the supplemented or amended Prospectus contemplated by the
preceding sentence or (ii) such Electing Holder is advised in writing by the
Company that the use of the Prospectus may be resumed and has received copies of
any additional or supplemental filings that are incorporated by reference in the
Prospectus. Notwithstanding the foregoing, but subject to Section 7 hereof, the
Company shall not be required to amend or supplement the Shelf Registration
Statement, any related Prospectus or any document incorporated by reference for
a period not to exceed 60 consecutive days if the Company is in possession of
material non-public information the disclosure of which would have a material
adverse effect on the business, operations, prospects, condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole.

          (k)  Not later than the Effective Time, the Company shall provide a
CUSIP number for the Registrable Securities that are debt securities.

          (l)  The Company shall use all reasonable efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after (i) the effective date (as defined in Rule 158(c) under the
Securities Act) of the Shelf Registration Statement, (ii) the effective date of
each post-effective amendment to the Shelf Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration Statement,
an earnings statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the Rules and Regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).

          (m)  Not later than the Effective Time, the Company shall cause the
Indenture to be qualified under the Trust Indenture Act; in connection with such
qualification, the Company shall cooperate with the Trustee under the Indenture
and the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company shall execute, and
shall use all reasonable efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner. In the event that any such amendment or
modification referred to in this Section 3(m) involves the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.

          (n)  In the event of an underwritten offering conducted pursuant to
Section 7 hereof, the Company shall (subject to paragraph 3(j) above), if
requested, promptly include or incorporate in a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement such information as
the Managing Underwriters reasonably agree should be included therein and to
which the Company does not reasonably object and shall (subject to paragraph
3(j)

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above) make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after it is notified of the matters to be
included or incorporated in such Prospectus supplement or post-effective
amendment.

          (o)  The Company shall enter into such customary agreements (including
an underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 7 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 hereof
with respect to all parties to be indemnified pursuant to Section 5 hereof;
provided, however, the Company shall not be required to facilitate an
underwritten offering pursuant to the Shelf Registration Statement by any
holders unless the offering relates to at least $15,000,000 principal amount of
Securities or the equivalent number of shares of Common Stock in which such
Securities are convertible.

          (p)  The Company shall:

               (i)   (A) make reasonably available for inspection by requesting
     Electing Holders, any underwriter participating in any disposition pursuant
     to the Shelf Registration Statement, and any attorney selected in
     accordance with Section 4(b) hereof, one accountant and any other agent
     retained by such holders or any such underwriter all relevant financial and
     other records, pertinent corporate documents and properties of the Company
     and its subsidiaries and (B) cause the Company's officers, directors and
     employees to supply all information reasonably requested by such holders or
     any such underwriter, attorney, accountant or agent in connection with the
     Shelf Registration Statement, in each case, as is customary for similar due
     diligence examinations; provided, however, that all records, information
     and documents that are designated in writing by the Company, in good faith,
     as confidential shall be kept confidential by such holders and any such
     underwriter, attorney, accountant or agent, unless such disclosure is made
     in connection with a court proceeding or required by law, or such records,
     information or documents become available to the public generally or
     through a third party without an accompanying obligation of
     confidentiality; and provided further that, if the foregoing inspection and
     information gathering would otherwise disrupt the Company's conduct of its
     business, such inspection and information gathering shall, to the greatest
     extent possible, be coordinated on behalf of the requesting Electing
     Holders and the other parties entitled thereto by one counsel designated by
     and on behalf of Electing Holders and other parties;

               (ii)  in connection with any underwritten offering conducted
     pursuant to Section 7 hereof, make such representations and warranties to
     the Electing Holders participating in such underwritten offering and to the
     Managing Underwriters, in form, substance and scope as are customarily made
     by the Company to underwriters in primary underwritten offerings of equity
     and convertible debt securities;

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               (iii) in connection with any underwritten offering conducted
     pursuant to Section 7 hereof, obtain opinions of counsel to the Company
     (which counsel and opinions (in form, scope and substance) shall be
     reasonably satisfactory to the Managing Underwriters) addressed to each
     requesting Electing Holder, covering such matters as are customarily
     covered in opinions requested in primary underwritten offerings of equity
     and convertible debt securities and such other matters as may be reasonably
     requested by such Electing Holders and underwriters (it being agreed that
     the matters to be covered by such opinions shall include, without
     limitation, as of the date of the opinion and as of the Effective Time or
     the date of the most recent post-effective amendment thereto, as the case
     may be, the absence from the Shelf Registration Statement and the
     Prospectus, including the documents incorporated by reference therein, of
     an untrue statement of a material fact or the omission of a material fact
     required to be stated therein or necessary to make the statements therein
     (in the case of the Prospectus, in light of the circumstances under which
     they were made) not misleading);

               (iv)  in connection with any underwritten offering conducted
     pursuant to Section 7 hereof, obtain "cold comfort" letters and updates
     thereof from the independent public accountants of the Company (and, if
     necessary, from the independent public accountants of any subsidiary of the
     Company or of any business acquired by the Company for which financial
     statements and financial data are, or are required to be, included in the
     Shelf Registration Statement), addressed to each requesting Electing Holder
     (if such Electing Holder has provided such letter, representations or
     documentation, if any, required for such cold comfort letter to be so
     addressed) and the underwriters, in customary form and covering matters of
     the type customarily covered in "cold comfort" letters in connection with
     primary underwritten offerings;

               (v)   in connection with any underwritten offering conducted
     pursuant to Section 7 hereof, deliver such documents and certificates as
     may be reasonably requested by any Electing Holders and the Managing
     Underwriters, if any, including without limitation certificates to evidence
     compliance with Section 3(j) hereof and with any conditions contained in
     the underwriting agreement or other agreements entered into by the Company.

          (q)  The Company will use all reasonable efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed for quotation on
the Nasdaq National Market System or other stock exchange or trading system, if
any, on which the Common Stock primarily trades on or prior to the Effective
Time.

          (r)  The Company shall use all reasonable efforts to take all other
steps necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.

     4.   Registration Expenses.

          (a)  All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by it whether or
not any Shelf Registration

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Statement is filed or becomes effective and whether or not any securities are
issued or sold pursuant to any Shelf Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including without limitation
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (B) in compliance with
securities or Blue Sky laws (including without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or counsel for the holders of Registrable Securities in
connection with Blue Sky qualifications of the Registrable Securities )), (ii)
printing expenses (including without limitation expenses of printing
certificates for Registrable Securities in a form eligible for deposit with DTC
and of printing Prospectuses if the printing of Prospectuses is requested by the
Managing Underwriters, if any), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and one counsel
for the holders of Registrable Securities (plus up to one local counsel deemed
appropriate by the holders of Registrable Securities of a majority in amount of
the Registrable Securities (determined on a fully-converted basis)), in
accordance with the provisions of Section 4(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 3(p)(iv) hereof (including without limitation the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Company desires
such insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the securities on
the Nasdaq National Market System. Notwithstanding the foregoing or anything in
this Agreement to the contrary, each holder of the Registrable Securities being
registered shall pay all commissions, placement agent fees and underwriting
discounts and commissions with respect to any Registrable Securities sold by it
and the fees and disbursements of any counsel or other advisors or experts
retained by such holders (severally or jointly), other than counsel and local
counsel referred to in clause (iv) above.

          (b)  In connection with any registration hereunder, the Company shall
reimburse the holders of the Registrable Securities being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel (in addition to any appropriate local counsel) chosen by the holders of
a majority in amount of the Registrable Securities (determined on a fully
converted basis) for whose benefit the applicable Shelf Registration Statement
is being prepared.

     5.   Indemnification and Contribution.

          (a)  Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, selling agent or
other securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person")

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against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement or any Prospectus contained therein or furnished by the Company to any
Indemnified Person, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and the
Company hereby agrees to reimburse such Indemnified Person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Shelf Registration Statement or
Prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Indemnified Person expressly for use therein; provided, further, however,
that the foregoing indemnity agreement with respect to any preliminary
Prospectus shall not inure to the benefit of any Indemnified Person who failed
to deliver a final Prospectus (as then amended or supplemented, provided by the
Company to the several Indemnified Persons in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the relevant transaction
date) to the person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any preliminary Prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the final Prospectus.

          (b)  Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign such Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company

                                      A-12
<PAGE>

by or on behalf of such holder, underwriter, selling agent or other securities
professional expressly for use therein and (ii) reimburse the Company and its
directors and officers who sign such Shelf Registration Statement for any legal
or other expenses reasonably incurred by the Company and such directors and
officers in connection with investigating or defending any such action or claim
as such expenses are incurred.

          (c)  Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) of this Section 5 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 5.
In case any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, which consent will not be unreasonably withheld, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.

          (d)  Contribution. If the indemnification provided for in this Section
5 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this Section 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just

                                      A-13
<PAGE>

and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this Section 5(d) to
contribute shall be several in proportion to the percentage of principal amount
of Registrable Securities registered or underwritten, as the case may be, by
them and not joint.

          (e)  Notwithstanding any other provision of this Section 5, in no
event will any (i) Electing Holder be required to undertake liability to any
person under this Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such holder from the sale of such holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.

          (f)  The obligations of the Company under this Section 5 shall be in
addition to any liability that the Company may otherwise have to any Indemnified
Person and the obligations of any Indemnified Person under this Section 5 shall
be in addition to any liability that such Indemnified Person may otherwise have
to the Company. The remedies provided in this Section 5 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
indemnified party at law or in equity.

     6.   Liquidated Damages. If (i) on or prior to 90 days after the Closing
Date, a Shelf Registration Statement has not been filed with the Commission,
(ii) on or prior to 180 days after the Closing Date, such Shelf Registration
Statement is not declared effective or, (iii) the Shelf Registration Statement
ceases to be effective or the Company otherwise prevents or restricts the
Electing Holders from making sales of Registrable Securities under such Shelf
Registration Statement during the Effectiveness Period for a period in excess of
60 consecutive days (each, a "Registration Default"), liquidated damages
("Liquidated Damages") will accrue on the Registrable Securities at a rate equal
to 0.5% of the principal amount of Registrable Securities per annum from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured or, if earlier, the last day
upon which the Shelf Registration Statement is required to be kept effective.
The Company shall notify the Trustee as promptly as possible, but in no event
more than three Business Days after each and every date on which a Registration
Default occurs. Liquidated Damages will be paid semi-

                                      A-14
<PAGE>

annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date in respect of the Registrable Securities following the
date on which such Liquidated Damages begin to accrue.

     7.   Underwritten Offering. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided, however, the Company shall not be required to
facilitate an underwritten offering pursuant to the Shelf Registration Statement
by any holders unless the offering relates to at least $20,000,000 principal
amount of Securities or the equivalent number of shares of Common Stock in which
such Securities are convertible. In any such underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company. No
holder may participate in any underwritten offering contemplated hereby unless
(a) such holder agrees to sell such holder's Registrable Securities to be
included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) if such holder is not then an Electing Holder,
such holder returns a completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(a)(ii) hereof within a reasonable amount of
time before such underwritten offering. The holders participating in any
underwritten offering shall be responsible for any underwriting discounts and
commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel. The Company shall pay all expenses customarily borne by issuers,
including but not limited to filing fees, the fees and disbursements of its
counsel and independent public accountants and any printing expenses incurred in
connection with such underwritten offering. Notwithstanding the foregoing or the
provisions of Section 3(n) hereof, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 60 days if the Company is in
possession of material non-public information the disclosure of which would have
a material adverse effect on the business, operations, prospects, condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole.

     8.   Rules 144 and 144A.

          The Company agrees, for so long as any Registrable Securities remain
outstanding and during any period in which the Company (a) is not subject to
Section 13 of 15(d) of the Exchange Act, to make available, upon request of any
holder of Registrable Securities, to such holder or beneficial owner of
Registrable Securities in connection with any sale thereof and any prospective
purchaser of such Registrable Securities designated by such holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of

                                      A-15
<PAGE>

such Registrable Securities pursuant to Rule 144A of the Securities Act, and (b)
is subject to Section 13 of 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such
Registrable Securities pursuant to Rule 144 of the Securities Act.

     9.   Miscellaneous.

          (a)  Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchasers or the holders of Registrable
Securities for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchasers or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company's
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

          (b)  Other Registration Rights. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company shall not permit any securities other than the Registrable
Securities to be included in any Shelf Registration Statement. The rights
granted to the holders of Registrable Securities hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.

          (c)  Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 2
hereof and this Section 9(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) (excluding Registrable Securities held
by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) being sold by such holders pursuant to
such Shelf Registration Statement.

          (d)  Third Party Beneficiary. The holders of Registrable Securities
shall be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Purchasers, on the other hand, and shall have
the right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
holders of Registrable Securities hereunder.

                                      A-16
<PAGE>

          (e)  Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.

          (f)  Parties in Interest. The parties to this Agreement intend that
all holders of Registrable Securities shall be entitled to receive the benefits
of this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.

          (g)  Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (h)  Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.

          (i)  Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, including without
limitation New York General Obligations Laws Section 5-1401.

          (j)  Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

          (k)  Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such holder, any
agent or underwriter, any director, officer or partner of such agent or
underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Registrable Securities of such
holder.

          (l)  Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the

                                      A-17
<PAGE>

agreement and understanding of the parties hereto in respect of the subject
matter hereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

                                      A-18
<PAGE>

     Please confirm by signing in the space provided below that the foregoing
correctly sets forth the agreement between the Company and you.

                                    Very truly yours,

                                    CELL THERAPEUTICS, INC.

                                    By: /s/ Jim Bianco
                                        ---------------------------------------
                                        Name:  James A. Bianco, M.D.
                                        Title: President and Chief Executive
                                               Officer

CIBC WORLD MARKETS CORP.
BANC OF AMERICA SECURITIES LLC
U.S. BANCORP PIPER JAFFRAY INC.

By:  CIBC WORLD MARKETS CORP.

By:  /s/ Andrew MacInnes
     ---------------------------
     Name:  Andrew MacInnes
     Title: Managing Director

                                      A-19<PAGE>

                                                                    EXHIBIT 4.1

                             SYNTROLEUM CORPORATION

                      1993 STOCK OPTION AND INCENTIVE PLAN
                        FIRST AMENDMENT AND RESTATEMENT
                          (Effective January 22, 2001)

1. Purpose

   The Syntroleum Corporation 1993 Stock Option and Incentive Plan is designed
to enable employees of the Company, as well as selected independent contractors
providing services to the Company, to acquire or increase their ownership of
the common stock of the Company on reasonable terms. The opportunity so
provided is intended to foster in participants a strong incentive to exert
maximum effort for the continued success and growth of the Company and the
enhancement of shareholder's interests, to aid in retaining individuals who
exert such efforts and to assist in attracting the best available individuals
in the future.

2. Definitions

   When used herein, the following terms shall have the meaning set forth
below:

  2.1 "Award" means an Option, an SAR or a Restricted Stock Award.

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

  2.3 "Code" Means the Internal Revenue Code of 1986 as amended from time to
      time.

  2.4 "Committee" means a committee of Directors appointed by the Board.

  2.5 "Company" means Syntroleum Corporation, a Delaware Corporation.

  2.6 "Director" means a member of the Board.

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

  2.8 "Fair Market Value" means: (i) if the Company's shares are listed on a
      national securities exchange or admitted to unlisted trading privileges
      on such exchange or listed for trading on the NASDAQ system, the last
      reported sale price of the Shares on such exchange on the last business
      day prior to the date on which the value is to be determined, or if no
      such sale is made on such day, the average closing bid and asked prices
      for such day on such exchange; or (ii) if the Company's Shares are not
      so listed or admitted to unlisted trading privileges, the mean of the
      last report bid and asked prices reported by the National Quotation
      Bureau, Inc. on the last business day prior to the date for which the
      value is to be determined; or (iii) if the Company's Shares are not so
      listed or admitted to unlisted trading privileges and bid and asked
      prices are not so reported, not less than book value, determined in
      such reasonable manner as may be prescribed by the Board, which
      determination shall be final and binding upon the Grantee.

  2.9 "Grantee" means a person to whom an Award is made.

  2.10 "Incentive Stock Option" or "ISO" means an Option awarded under the
       Plan which meets the terms and conditions established by Code Section
       422 and applicable regulations thereunder for such an Option.

  2.11 "Non-Qualified Stock Option" or "NQSO" means an Option awarded under
       the Plan which by its terms and conditions is not an ISO.025

                                      B-1
<PAGE>

  2.12 "Option" means the right to purchase, at a price, for a term, under
       conditions, and for cash or other considerations fixed by the
       Committee in accordance with such restrictions as the Plan and the
       Committee impose, a number of Shares specified by the Committee. An
       Option can be either an ISO or NQSO or a combination thereof.

  2.13 "Plan" means the Company's 1993 Stock Option and Incentive Plan.

  2.14 "Restricted Stock Award" means the grant of a right to receive, at a
       time or times fixed by the Committee in accordance with the Plan and
       subject to such other limitations and restrictions as the Plan and the
       Committee impose, the number of Shares specified by the Committee.

  2.15 "Right of First Refusal" means the right of the Company to repurchase
       Shares awarded under the Plan at their then Fair Market Value prior to
       such Shares being offered for sale to any other party. This right
       shall apply to all grantees and their guardians, legal
       representatives, joint tenants, tenants in common, heirs or
       successors. This right shall not apply to any Shares which are subject
       to a right of first refusal contained in any agreement between and
       among the Company and its Shareholders.

  2.16 "SAR" means a right to surrender to the Company all or a portion of an
       Option and to be paid therefor an amount, in cash or Shares, as
       determined by the Committee, provided that the amount of cash or the
       fair Market Value of Shares, as the case may be, shall be no greater
       than the excess, if any, of (i) the Fair Market Value, on the date
       such right is exercised, of the Shares to which the Option or portion
       thereof relates, over (ii) the aggregate option price of those Shares.

  2.17 "Securities Act" means the Securities Act of 1933, as amended.

  2.18 "Shares" means shares of the Company's common stock, par value $0.01
       per share, or, if by reason of the adjustment provisions hereof any
       rights under an Award under the Plan pertain to any other security,
       such other security.

  2.19 "Subsidiary" means any business, whether or not incorporated, in which
       the Company, at the time an Award is granted or in other cases at the
       time of reference, owns directly or indirectly not less than 50% of
       the equity interest.

  2.20 "Successor" means the legal representative of the estate of a deceased
       Grantee or the person or persons who shall acquire the right to
       exercise an Option or an SAR, or to receive Shares issuable in
       satisfaction of a Restricted Stock Award, by bequest or inheritance or
       by reason of the death of the Grantee.

  2.21 "Term" means the period during which a particular Option or SAR may be
       exercised or the period during which the restrictions placed on a
       Restricted Stock Award are in effect.

3. Administration of The Plan

  3.1 The Plan shall be administered by the Committee, comprised from time to
      time of not fewer than three members.

  3.2 The Committee shall have plenary authority, subject to provisions of
      the Plan, to determine when and to whom Awards shall be granted, the
      Term of each award, the number of Shares covered by it, the
      participation by Grantee in other plans, and any other terms or
      conditions of each such Award. The number of Shares, the Term and other
      terms and conditions of a particular kind of Award need not be the
      same, even as to similarly situated Grantees. The Committee's actions
      in making Awards and fixing their size, Term, and other terms and
      conditions shall be final and conclusive on all persons.

                                      B-2
<PAGE>

  3.3 The Committee shall have the sole responsibility for construing and
      interpreting the Plan, for establishing and amending such rules and
      regulations as it deems necessary or desirable for the proper
      administration of the Plan, and for resolving all questions arising
      under the Plan. Any decision or action taken by the Committee arising
      out of or in connection with the construction, administration,
      interpretation and effect of the Plan and of its rules and regulations
      shall, to the extent permitted by law, be within its absolute
      discretion, except as otherwise specifically provided herein, and shall
      be conclusive and binding upon all Grantees, all Successors, and any
      other person, whether that person is claiming under or through any
      Grantee or otherwise.

  3.4 The Committee shall designate one of its members as Chairman. It shall
      hold its meetings at such times and places as it may determine. A
      majority of its members shall constitute a quorum, and all
      determinations of the Committee shall be made by a majority of its
      members. Any determination reduced to writing and signed by all members
      shall be fully as effective as if it had been made by a majority vote
      at a meeting duly called and held. The Committee may appoint a
      Secretary, who needs not be a member of the Committee. The Committee
      may make such rules and regulations for the conduct of its business as
      it shall deem advisable.

  3.5 Service on the Committee shall constitute service as a Director of the
      Company, so that the members of the Committee shall be entitled to
      indemnification and reimbursement as Directors of the Company pursuant
      to its Bylaws and to any agreements between the Company and its
      Directors providing for indemnification.

4. Eligibility

   Awards may be made under the Plan to (i) individuals who are employees of
the Company or a Subsidiary or who have agreed to become employees within six
months of the grant date or (ii) individuals who are independent contractors
providing services to the Company or a Subsidiary. Officers shall be employees
for this purpose, whether or not they are also Directors. A Director who is not
an employee of the Company or a Subsidiary shall not be eligible to receive an
Award. Awards may be made to eligible employees or independent contractors
whether or not they have received prior Awards under the Plan or under any
previously adopted plan, and whether or not they are participants in other
benefits plans of the Company or any Subsidiary.

5. Shares Subject to Plan

   The Company hereby reserves 5,000,000 Shares for issuance in connection with
Awards under the Plan, subject to adjustment under Section 19. No individual
may be granted, during any calendar year, Options or SARs exercisable for more
than 100,000 Shares. The shares so issued may be unreserved Shares held in the
treasury, however acquired, or Shares which are authorized but unissued. Any
Shares subject to issuance upon exercise of Options or upon the lapsing of
restrictions imposed in connection with the making of Restricted Stock Awards
but which are not issued because of a surrender, lapse, expiration or
termination of any such Option or Restricted Stock Award prior to issuance of
the Shares shall once again be available for issuance in satisfaction of
Awards. Shares withheld by the Company as payment of the exercise price
pursuant to Section 13.4 or pursuant to a tax withholding election permitted
under Section 21.2 hereof and Shares owned by a Grantee which are used in the
exercise of an Option under Section 13.3 hereof shall be deemed issued under
the Plan. In the event of the exercise of an SAR, the number of Shares reserved
for issuance hereunder shall be reduced by the number of Shares covered by the
SAR.

6. Granting of Options

  6.1 Subject to the terms of the Plan, the Committee may from time to time
      grant Options to persons eligible under Section 4 above. Only employees
      are eligible to be granted ISOs.

  6.2 The purchase price of each Share subject to Option shall be fixed by
      the Committee provided the purchase price shall not be less than 100%
      of the Fair Market Value of the Shares on the date the Option is
      granted.

                                      B-3
<PAGE>

  6.3 Each Option shall expire and all rights to purchase Shares thereunder
      shall cease on the date fixed by the Committee.

  6.4 Each Option shall become exercisable at the time, and for the number of
      Shares, fixed by the Committee.

  6.5 Subject to the terms of the Plan, the Committee may make all or any
      portion of option Shares subject to a Right of First Refusal for any
      period of time set by the Committee at the time of Award.

7. Stock Appreciation Rights

  7.1 The Committee may, in its discretion, grant an SAR to the holder of an
      Option, either at the time the Option is granted or by amending the
      instrument evidencing the grant of the Option at any time after the
      Option is granted.

  7.2 Each SAR shall be for such Term, and shall be subject to such other
      terms and conditions, as the Committee shall impose. The terms and
      conditions may include Committee approval of the exercise of the SAR,
      limitations on the amount of appreciation which may be recognized with
      regard to such SAR, and specification of what portion, if any, of the
      amount payable to the Grantee upon his exercise of an SAR shall be paid
      in cash and what portion, if any, shall be payable in Shares. If and to
      the extent that Shares are issued in satisfaction of amounts payable on
      exercise of an SAR, the Shares shall be valued at their Fair Market
      Value on the date of exercise.

  7.3 Upon exercise of an SAR, the Option or portion thereof with respect to
      which such right is exercised shall be surrendered and shall not
      thereafter be exercisable. Upon exercise of an Option, any SAR or
      portion thereof granted with respect to such Option shall expire and
      shall not thereafter be exercisable.

8. Restricted Stock Awards

  8.1 Subject to the terms of the Plan, the Committee may grant eligible
      employees and independent contractors Restricted Stock Awards which
      shall entitle Grantees to receive Shares in the future for no cash
      consideration and which shall be subject to forfeiture if the Grantee's
      employment or service is terminated for any reason other than death,
      disability or retirement, and to such other terms and conditions
      (including attainment of performance objectives) as may be determined
      by the Committee.

  8.2 The terms and condition of any such award, including restrictions on
      transfer or on the ability of the Grantee to make elections with
      respect to the taxation of the Award without the consent of the
      Committee, shall be determined by the Committee.

  8.3 At the time of grant of a Restricted Stock Award, the Grantee shall
      receive written evidence of the Award in such form as may be approved
      by the Committee but shall not be entitled to issuance or delivery of a
      stock certificate evidencing the Shares covered by the Award until the
      lapse of the restrictions, pursuant to the Award. Upon the lapse of the
      restrictions, a certificate or certificates representing the number of
      Shares covered by the award, free and clear of all restrictions (except
      for those of the nature described in section 6.5), shall be issued and
      registered in the name of, and delivered to, the Grantee.

  8.4 The Committee may establish terms and conditions under which the
      Grantee of a Restricted Stock Award shall be entitled to receive a
      credit equivalent to any dividend payable with respect to the number of
      Shares which as of the record date for such dividends, shall be paid to
      the Grantee of the Restricted Stock Award at such time or times during
      the Restricted Stock Award, or at the time the Shares to which the
      dividend equivalents apply are delivered to the grantee, as the
      Committee shall determine. Any arrangement for the payment of dividend
      equivalents shall be terminated if, under the terms and conditions
      established by the Committee, the right to be issued shares pursuant to
      the terms of the Restricted Stock Award shall terminate.

                                      B-4
<PAGE>

9. Non-transferability of Rights

   Unless the Committee specifically provides otherwise, no Award and no right
under any Award shall be assignable or transferable otherwise than by will or
the laws of descent and distribution and, except to the extent otherwise
provided in Section 10, the rights and the benefits of any such award may be
exercised and received, respectively, during the lifetime of the Grantee only
by him or by his guardian or legal representative.

10. Death, Disability, Retirement and Other Termination of Employment

  10.1 Subject to the terms of the Plan, the Committee may make such
       provisions concerning exercise or lapse of Options or SARs upon the
       grantee's death, disability, retirement, or other termination of
       employment as it shall in its discretion determine.

  10.2 Subject to the provisions of the Plan, the Committee may make such
       provisions regarding the lapse of restrictions on Restricted Stock
       Awards as it shall in its discretion determine.

  10.3 Each grantee may name, from time to time, any beneficiary or
       beneficiaries (who may be named contingently or successively) to whom
       any benefit or rights under the Plan is to be paid or transferred in
       case of his death before he receives any or all of such benefit or
       exercises such rights. Each designation will revoke all prior
       designations by the same Grantee, shall be in a form prescribed by the
       Committee, and will be effective only when filed by the Grantee in
       writing with the Committee during his lifetime. In the absence of any
       such designation, benefits or rights remaining unpaid or unexercised
       at the Grantee's death shall be paid to or shall be exercisable by his
       estate, subject to the terms hereof.

11. Provisions Relating to Change in Control

   Notwithstanding any provision in this Plan to the contrary, (i) the
restrictions on all Restricted Stock Awards shall lapse immediately and (ii)
all outstanding Options, together with any related SARs shall become
exercisable immediately if either of the following events occur, unless
otherwise determined by the Committee:

     (1) Any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
  Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
  the Exchange Act), directly or indirectly, of securities of the Company
  representing twenty-five percent (25%) or more of the combined voting power
  of the Company's then outstanding securities.

     (2) At any time (not including any period prior to the adoption of this
  Plan) there shall cease to be a majority of the Board comprised as follows:
  individuals who at the beginning of such period constitute the Board and
  any new Director(s) whose election by the Board or nomination for election
  by the Board or nomination for election by the Company's shareholders was
  approved by a vote of at least two-thirds (2/3) of the Directors then still
  in office who either were Directors at the beginning of the period or whose
  election or nomination for election was previously so approved.

12. Writing Evidencing Awards

   Each Award granted under the Plan shall be evidenced by a writing which may,
but need not, be in the form of an agreement to be signed by the Grantee. The
writing shall set forth the nature and size of the Award, its Term, the other
terms and conditions thereof, other than those set forth in the Plan, and such
other information as the Committee directs. Acceptance of, or receipt of the
benefits of, an Award by the Grantee shall be conclusively presumed to be
assent to the terms and conditions set forth therein, whether or not the
writing is in the form of an agreement to be signed by the Grantee.

13. Exercise of Rights Under Awards

  13.1 A person entitled to exercise an Option or SAR may do so by delivery
       of a written notice to that effect specifying the number of Shares
       with respect to which the Option or SAR is being exercised and any
       other information the Committee may prescribe.

                                      B-5
<PAGE>

  13.2 The notice of exercise shall be accompanied by payment in full of the
       purchase price for any Shares to be purchased, with such payment being
       made in cash or, if permitted by the Committee, in shares having a
       Fair Market Value equivalent to the purchase price of such shares to
       be purchased, or a combination thereof.

  13.3 In lieu of delivery of a Stock certificate or certificates evidencing
       Shares tendered by the Grantee in payment of the purchase price in
       exercising an Option, the Grantee may, if authorized and pursuant to
       rules adopted by the Committee, furnish a notarized statement executed
       by the Grantee, in such form as prescribed by the Committee, as
       payment for all or a portion of the purchase price for such Shares.
       The statement shall recite the number of Shares being purchased by the
       Grantee pursuant to the Option and the number of Shares owned by the
       Grantee which otherwise could be freely delivered as payment of the
       purchase price by the Grantee based on their fair Market Value. The
       Grantee will then be issued a certificate for new Shares equal to the
       number of Shares acquired by the Grantee and described in the
       notarized statement. No Shares shall be issued upon exercise of an
       Option until full payment has been made therefor.

  13.4 In lieu of payment by the Grantee in cash or in Shares or by delivery
       of a notarized statement of ownership pursuant to Sections 13.2 and
       13.3 respectively, the Grantee may, pursuant to rules adopted by and
       with the consent of the Committee, elect to pay all or part of the
       purchase price for Shares pursuant to an exercise of an Option by
       requesting the Company to reduce the number of Shares otherwise
       issuable to the Grantee upon the exercise of the Option by the number
       of Shares with a Fair Market Value sufficient to pay the exercise
       price. Any such election shall be made by delivering written notice
       thereof to the Company, together with such information and documents
       as the Committee may prescribe, and shall be subject to approval by
       the Committee.

  13.5The notice of exercise of an SAR shall be in writing.

  13.6 Upon exercise of an Option or SAR, or after grant of a Restricted
       Stock Award but before a distribution of Shares in satisfaction
       thereof, the Grantee may request in writing that the shares to be
       issued in satisfaction of the Award be issued in the name of the
       Grantee and another person as joint tenants with right of survivorship
       or as tenants in common.

  13.7 All notices or requests to the Company provided for herein shall be
       delivered to the secretary of the Company.

14. Effective Date of the Plan and Duration

  14.1 The Plan became effective on May 10, 1993, and as amended and restated
       shall become effective on January 22, 2001, subject to the approval of
       the holders of a majority of outstanding shares present or represented
       and entitled to vote at a duly called meeting of shareholders within
       twelve months of such date.

  14.2 The Plan shall remain in effect until all Awards have been exercised
       or satisfied in accordance herewith, but no Awards may be granted
       under the Plan after January 22, 2011. The terms of any Award may be
       amended at any time prior to the end of its Term in accordance with
       the Plan.

15. Date of Award

   The date of an Award shall be the date on which the Committee's
determination to grant the same is final, or such later date as shall be
specified by the Committee in connection with its determination.

16. Shareholder Status

   No person shall have any rights as a shareholder by virtue of the grant of
an Award under the Plan, except with respect to Shares actually issued to that
person.

                                      B-6
<PAGE>

17. Postponement Or Non-exercise

   The Company shall not be required to issue any certificate or certificates
for Shares upon the exercise of an Option or SAR or upon the vesting of a
Restricted Stock Award granted under the Plan prior to (i) the obtaining of any
approval from any governmental agency which the Company shall, in its sole
discretion, determine to be necessary or advisable, (ii) the taking of any
action in order to comply with restrictions or regulations incident to the
maintenance of a public market for its Shares; and (iii) the completion of any
registration or other qualification of such Shares under any state or Federal
law or rulings or regulations of any governmental body which the Company shall,
in its sole discretion, determine to be necessary or advisable. The Company
shall not be obligated by virtue of any terms and conditions of any Award or
any provisions of the Plan to recognize the exercise of an Option or an SAR or
to sell or issue shares in violation of the laws of any government having
jurisdiction thereof. Any postponement or delay by the Company in recognizing
the exercise of any Option or SAR or in issuing any Shares under a Restricted
Stock Award or otherwise hereunder shall not extend the Term of an Option or
SAR nor shorten the Term of any restriction attached to any Restricted Stock
Award and neither the Company nor its directors or officers shall have any
obligation or liability to the Grantee of an Award, to a Successor or to any
other person with respect to any Shares as to which the Option or SAR shall
lapse because of such postponement or as to which issuance under a Restricted
Stock Award was delayed.

18. Termination, Suspension Or Modification of Plan

   The Board may terminate, suspend or modify the Plan at any time and in any
manner, provided, however, that to the extent shareholder approval is required
by the Code (with respect to ISOs) or is required by applicable law, the Board
shall not, without authorization of the shareholders, effect any change (other
than through adjustment for changes in capitalization or as otherwise herein
provided) which:

    (i) increases the aggregate number of Shares for which Awards may be
        granted;

    (ii) lowers the minimum Option price that the Company may establish
         with respect to an Option grant; or

    (iii) increases the maximum amount a Grantee may be paid upon the
       exercise of an SAR.

   Notwithstanding the foregoing, (i) the Board may amend the Plan, without
shareholder authorization, to comply with the Exchange Act or regulations
issued thereunder, to effect registration of the Plan or securities issuable
thereunder under the Securities Act or the laws of any state or to obtain any
required regulatory approval and (ii) if amendments to the Code or to the
Securities Act or Exchange Act, or regulations issued thereunder, are adopted
after the date of adoption of the Plan, which amendments permit termination,
suspension or modification of the Plan, including but not limited to the
changes referred to above, without shareholder approval, no authorization by
the Company's shareholders of any Board action hereunder shall be required.

   No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Grantee or any Successor under an Award
granted before the date of such termination, suspension or modification unless
such Grantee or Successor shall consent but it shall be conclusively presumed
that any adjustment for changes in capitalization as provided for herein does
not adversely affect any such right.

19.Adjustments for Corporate Changes

  19.2 In the event of a recapitalization, stock split, stock dividend,
       combination or exchange of shares, merger, consolidation, rights
       offering, reorganization or liquidation, or any other change in the
       corporate structure or shares of the Company, the Committee shall (i)
       make such equitable adjustments, when appropriate, designed to protect
       against dilution or enlargement, in the number and kind of Shares
       authorized by the Plan and, with respect to outstanding Awards, in the
       number and kind of Shares covered thereby and in the Option price, and
       (ii) make such arrangements, which

                                      B-7
<PAGE>

      shall be binding upon the holders of unexpired Option and SARs and
      outstanding Restricted Stock Awards, for the substitution of new
      Options, SARs or Restricted Stock Awards, for any unexpired Options,
      SARs or Restricted Stock Awards then outstanding under the Plan or for
      the assumption of any such unexpired Options and SARs and outstanding
      Restricted Stock Awards.

  19.3 In the event that the Company agrees (i) to sell or otherwise dispose
       of all or substantially all of the Company's assets, or (ii) to be
       wholly or partially liquidated, or (iii) to participate in a merger,
       consolidation or reorganization, or (iv) to sell or otherwise dispose
       of substantially all the assets of, or a majority interest in, a
       Subsidiary, then the Committee may determine that any and all Options
       granted under the Plan, in situations involving an event described in
       clauses (i) through (iii), and any and all Options granted to
       employees or independent contractors of the affected Subsidiary, in
       situations described in clause (iv), together with any related SARs,
       shall be immediately exercisable in full, and any and all Shares
       issuable pursuant to Restricted Stock Awards made under the Plan, in
       situations involving an event described in clauses (i) through (iii),
       and any and all Shares issuable pursuant to Restricted Stock Awards
       granted to employees or independent contractors of the affected
       Subsidiary, in situations described in clause (iv), shall be
       immediately issuable in full, free and clear of all restrictions
       except as described in Section 6.5 hereof. The Committee may also
       determine that any Options (and related SARs) not exercised, and any
       Restricted Stock Awards with respect to which restrictions shall not
       have lapsed, prior to any such event, or within such period of time
       thereafter (not to exceed 30 days) as the Committee shall determine,
       shall terminate.

  19.4 The grant of any Award pursuant to the Plan shall not affect in any
       way the right or power of the Company to make adjustments,
       reclassifications, reorganizations or changes of its capital or
       business structure or to merge or to consolidate or to dissolve,
       liquidate or sell, or transfer all or any part of its business or
       assets or the business, assets or the business, assets or stock of a
       Subsidiary.

20. Non-uniform Determination

   The Committee's determination under the Plan including, without limitation,
determination of the persons to receive Awards, the form, amount and type of
Awards (i.e., ISOs, NQSOs, SARs, Restricted Stock Awards), the terms and
provisions of Awards and the written material evidencing such Awards, any
amendments to the terms and provisions of any Awards, and the granting or
rejecting of applications for delivery of Shares or affidavits of ownership in
lieu of cash payments, need not be uniform and may be made selectively among
otherwise eligible employees or independent contractors whether or not such
employees or independent contractors are similarly situated.

21.Taxes

  21.1 The Company may pay, withhold or require a Grantee to remit to it
       amounts sufficient to satisfy the Company's federal, state, local or
       other tax withholding obligations attributable to any Awards after
       giving notice to the person entitled to receive such amount, and the
       Company may defer making payment of any Award if any such tax, charge
       or assessment may be pending until indemnified to its satisfaction.

  21.2 Subject to the consent of the Committee, in connection with (i) the
       exercise of an Option, (ii) lapse of restrictions on a Restricted
       Stock Award, or (iii) the issuance of any other Stock award under the
       Plan, a Grantee may make an irrevocable election to (a) have Shares
       otherwise issuable under (i) withheld, or (b) tender back to the
       Company Shares received pursuant to (i), (ii) or (iii), or (c) deliver
       back to the Company pursuant to (i), (ii) or (iii) previously-acquired
       Shares, having a Fair Market Value sufficient to satisfy all or part
       of the Company's total federal, state, local and other tax withholding
       obligations associated with the transaction. Any such election shall
       be made in the manner prescribed by the Committee. The Committee may
       disapprove of any election, may suspend or terminate the right to make
       elections, or may provide with respect to any Award under this Plan
       that the right to make elections shall not apply to such Awards.

                                      B-8
<PAGE>

22. Tenure

   Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any participant the right to continue in the employment or
service of the Company or any Subsidiary or affect any right which the Company
or Subsidiary has to terminate the employment or service of such participant.
An employee or independent contractor terminated for cause, as determined by
the Company, shall forfeit all of his rights under the Plan, except as to
Options or SARs already exercised and Restricted Stock Awards on which
restrictions have already lapsed.

23. Application of Proceeds

   The proceeds received by the Company from the sale of its shares under the
Plan shall be used for general corporate purposes of the Company and its
Subsidiaries.

24. Other Actions

   Nothing in the Plan shall be construed to limit the authority of the Company
to exercise its corporate rights and powers, including, by way of illustration
and not by way of limitation, the right to grant options for proper corporate
purposes otherwise than under the Plan to any employee or any other person,
firm, corporation, association or other entity, or to grant options to, or
assume options of, any person in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of all or any part of the business
and assets of any person, firm, corporation, association or other entity.

25. Gender and Number

   Except when otherwise indicated by the context, words in the masculine
gender when used in the Plan shall include the feminine gender, the singular
shall include the plural, and the plural shall include the singular.

26. Requirements of Law, Governing Law

   The granting of Awards and the issuance of shares of Stock shall be subject
to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. The
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws so the State of Delaware.

27. Effect On Other Plans

   Participation in this Plan shall not affect an employee's or independent
contractor's eligibility to participate in any other benefit or incentive plan
of the Company or a Subsidiary. Any Awards made pursuant hereto shall not be
used in determining the benefits provided under any other plan of the Company
or a Subsidiary unless specifically provided therein.

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

         Approved by the Board of Directors effective January 22, 2001.

                                      B-9

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