Document:

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                                                                   EXHIBIT 10.39

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                SUPPLY AGREEMENT

         This supply agreement is entered into as of April 15, 1998, (the
"Effective Date") between Organon Teknika Corporation ("TEKNIKA"), a Delaware
corporation, with its principal offices at 100 Akzo Avenue, Durham, North
Carolina, and CancerVax, Inc. ("CANCERVAX"), a California corporation, with its
principal offices at 802 84th Avenue NE, Medina, Washington (each singularly a
"Party" and collectively the "Parties") with reference to the following:

                                    RECITALS

         WHEREAS, Teknika manufactures BCG, as defined below, and

         WHEREAS, CancerVax is performing research and development in the field
of vaccines for human cancers and is interested in purchasing BCG from Teknika
for use in clinical trials and possible commercial sales of such vaccines; and

         WHEREAS, Teknika is willing to sell BCG to CancerVax for such purposes;

         THEREFORE, the parties agree as follows:

1.       DEFINITIONS. The following terms shall have the following meanings for
purposes of this Agreement:

         1.1      "AFFILIATE" means any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns, is owned
by, or is under common ownership with a party to this Agreement to the extent of
at least fifty percent (50%) of the equity (or such lesser percentage which is
the maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs of the entity
and any person, firm, partnership, corporation or other entity actually
controlled by, controlling, or under common control with a party to this
Agreement. For example, Akzo Nobel, N.V. is an Affiliate of Teknika pursuant to
this definition.

         1.2      "AGREEMENT" means this Supply Agreement, including any
exhibits, schedules or other attachments thereto, as any of the foregoing may be
validly amended and agreed to in writing by the Parties from time to time.

         1.3      "COMMERCIAL INTRODUCTION" means the date of first commercial
sale (other than for purposes of obtaining regulatory approval) of a Melanoma
Vaccine by CancerVax, Inc.

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         1.4      "EFFECTIVE DATE" is defined in the introductory paragraph.

         1.5      "cGLPs" means the current Good Laboratory Practices for
Finished Pharmaceuticals pursuant to 21 C.F.R. 58 et sea., as amended from time
to time.

         1.6      "cGMPs" means the current Good Manufacturing Practices for
Finished Pharmaceuticals pursuant to 21 C.F.R. 210 et seci., as amended from
time to time.

         1.7      "BCG" means Bacillus Calmette Guerin.

         1.8      "BCG REQUIREMENTS" means the quantity of BCG in doses which
CancerVax may require for all research and development, pre-clinical and human
clinical testing of Melanoma Vaccines and, after Commercial Introduction, for
Melanoma Vaccines for commercial sales.

         1.9      "KNOW-HOW" means materials, data, results, formulae, designs,
specifications, methods, processes, improvements, techniques, ideas,
discoveries, technical information, process information, clinical information
and any other information, whether or not any of the foregoing is patentable,
which is confidential (in accordance with Section 3 hereof) and proprietary to
Teknika now or hereafter during the Term of this Agreement, related to the
development, manufacture, use or sale of BCG in connection with the development,
manufacture, use or sale of any Melanoma Vaccine, provided however, that the
term "Know-how" shall not include any of the foregoing that is subject to
proprietary rights of third parties.

         1.10     "MELANOMA VACCINE" means the CVAX-M vaccine or vaccines
employing the CVAX-M antigen structure (whether alone or in combination) for the
prevention or treatment of human cancers.

         1.11     "MANUFACTURE" OR "MANUFACTURING PROCESS" means the
aseptic-storage, handling, production, processing and packaging of BCG in
accordance with this Agreement.

         1.12     "MANUFACTURING YEAR" means each calendar year commencing after
the Effective Date.

         1.13     "PARTY" and "PARTIES" are defined in the introductory
paragraph.

         1.14     "TEKNIKA" means Organon Teknika Corporation, a Delaware
corporation, its Affiliates and its successors and permitted assigns.

         1.15     "SPECIFICATIONS" means those product requirements defined in
Teknika's FDA Product License.

         1.16     "TERM" is defined in Section 4.1.

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         1.17     "CANCERVAX" means CancerVax, Inc., a California corporation,
its Affiliates and its permitted successors and assigns.

         1.18     "FDA" means the U.S. Food and Drug Administration.

2.       MANUFACTURE AND SUPPLY.

         2.1      GENERAL. CancerVax agrees that Teknika shall have the
exclusive right and obligation during the Term to Manufacture and supply to
CancerVax one hundred percent (100%) of its reasonable BCG Requirements for
purposes of research and development, pre-clinical studies and human clinical
trials and commercial sales of Melanoma Vaccines. Teknika hereby agrees, at its
sole expense, to commit all reasonably necessary facilities, appropriately
trained personnel, machinery, equipment, utilities and other Teknika resources
required to satisfy its obligations under this Agreement. Nothing herein,
however, shall be deemed to require Teknika, other than as it may decide in its
sole discretion, to expand beyond its current BCG Manufacturing facility. It is
further understood that if for reasons beyond its reasonable control, Teknika is
unable to fill all orders for BCG which it receives, then Teknika may equitably
apportion the supply of BCG among all orders it receives and fill such orders
partially without being in breach of this Agreement.

         2.2      TEKNIKA TRANSFER PRICE OF BCG.

         With respect to each and every Melanoma Vaccine, Teknika shall, subject
to the forecasts and purchase order provisions of Section 2.4 below, Manufacture
and supply one hundred percent (100%) of BCG Requirements of such Melanoma
Vaccine (i.e., for IND BCG, Pivotal Trial BCG, and Commercial Sale BCG as
defined in Section 2.3. Teknika agrees to supply IND BCG at a transfer price of
[***] per dose. Teknika agrees to provide a reasonable quantity of Pivotal Trial
BCG at [***]. Teknika agrees to supply Commercial Sale BCG at a transfer price
equal to the average wholesale price of TICE(R) BCG (NDC No. 0052-0602-02), as
quoted in the "Drug Topics Redbook", as amended from time to time, less [***].
In the event the Drug Topics Redbook is no longer published, the average
wholesale price shall be determined by reference to a mutually acceptable
comparable publication or in an otherwise mutually acceptable manner.

         2.3      TEKNIKA'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Teknika
hereby represents and warrants to CancerVax as follows:

                  (a)      PRE-CLINICAL STUDY AND HUMAN CLINICAL TRIAL USE.
Teknika shall exercise diligent efforts to Manufacture all reasonable BCG
Requirements for use in any vaccine used in connection with any pre-clinical
study or human clinical trial of any Melanoma Vaccine (the "IND BCG") (i) in
compliance with (A) this Agreement, (B) all Specifications, and (C) all
applicable laws and regulations, including but not limited to

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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cGMPs to the extent applicable, and (ii) in a Teknika facility holding all
applicable licenses in the jurisdiction of Manufacture.

                  (b)      PIVOTAL CLINICAL TRIALS. Teknika shall manufacture
all BCG Requirements provided for herein for use in any vaccine used in
connection with pivotal (Phase II and/or Phase III) clinical trials (the
"Pivotal Trial BCG") and shall supply same to Cancervax upon Cancervax providing
Teknika with the pertinent protocols which identify the quantity of Pivotal
Trial BCG, at no charge per dose, up to the amount of doses required by said
protocols.

                  (c)      COMMERCIAL USE. Teknika shall Manufacture all BCG
Requirements provided for herein for use in the commercialization of any
Melanoma Vaccine (the "Commercial Sale BCG") (i) in compliance with (A) this
Agreement, (B) all Specifications, and (C) all applicable laws and regulations,
including but not limited to cGMPs to the extent applicable, and (ii) in a
Teknika facility holding all applicable licenses in the jurisdiction of
Manufacture. Teknika shall provide the Commercial Sale BCG to CancerVax under a
private label pending FDA approval of that label.

                  (d)      CERTIFICATE OF ANALYSIS: NON-COMPLYING BCG. Before,
during and after Manufacture of BCG Requirements, as applicable, Teknika shall
obtain samples, monitor the Manufacturing Process and the environment of such
Manufacture, and keep such technical books and records of all of the foregoing
as are required under the Specifications and Procedures and all applicable laws
and regulations, including but not limited to cGLPs or cGMPs (as appropriate and
applicable). Teknika shall test each lot of BCG Requirements manufactured for
CancerVax or as required under the Specifications. Together with each such lot
of BCG Requirements, Teknika shall provide a written certificate of analysis
which shall set forth the results of such testing by Teknika and Teknika's
quality control approval of such lot of BCG Requirements. Teknika's obligations
under this Section 2.3(d) shall be performed at Teknika's sole expense.
CancerVax shall be entitled to test any such BCG Requirements in accordance with
the Specifications, at CancerVax's sole expense. Without limiting any of
CancerVax's other rights or remedies under this Agreement with respect to any
BCG Requirements supplied hereunder that do not comply with applicable
representations and warranties under this Section 2.3, and provided Teknika
reasonably confirms CancerVax's test results, the Parties agree that; (i)
CancerVax shall not be obligated to pay Teknika the transfer price applicable to
such non-complying BCG Requirements; (ii) if CancerVax has already paid for such
non-complying BCG Requirements, CancerVax shall be entitled to a credit against
future purchases for the amount paid to Teknika therefor; (iii) Teknika shall,
on a priority basis, Manufacture and supply to CancerVax, as applicable,
replacement BCG Requirements in full compliance with this Section 2.3; and (iv)
Teknika shall bear the reasonable cost of returning or destroying the non-
complying BCG Requirements.

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         2.4      PROCEDURES FOR ESTIMATING, ORDERING AND SUPPLYING - BCG
REQUIREMENTS.

         Subject to the other terms of this Agreement:

                  (a)      ANNUAL DEMAND FORECAST FOR EACH MANUFACTURING YEAR.
Upon execution hereof, CancerVax will provide Teknika with a written rolling
forecast of BCG Requirements for each month of calendar year 1998, which shall
be binding as to the first three (3) months and non-binding as to the remaining
nine (9) months. Thereafter, CancerVax shall provide, by the end of each
calendar month, an updated rolling forecast for the twelve (12) calendar months
beginning three (3) months thence, the first three (3) months of which shall be
considered as binding.

                  (b)      PURCHASE ORDERS. CancerVax shall place a firm
purchase order or purchase orders with Teknika setting forth (i) the quantities
of BCG Requirements to be supplied hereunder, (ii) the requested schedule for
delivery from Teknika of such BCG Requirements, and (iii) instructions for
shipping and packaging. The first such purchase order shall be placed upon
execution of this Agreement and each succeeding firm purchase order shall be
submitted no less than 120 days in advance of the first requested date of
delivery thereof. Subject to the other terms of this Agreement, CancerVax shall
be obligated to place firm purchase orders with Teknika for, and Teknika hereby
commits to Manufacture and supply hereunder pursuant to such firm purchase
orders, one hundred percent (100%) of the amount of BCG Requirements in the
binding portion of each twelve (12) month forecast under Section 2.4(a);
provided, however, that: (A) the Parties may mutually agree in writing to amend
any such firm purchase order; (B) Teknika in its discretion may agree to
Manufacture and supply hereunder additional amounts of BCG Requirements in
excess of the then-binding amount, provided that CancerVax places firm purchase
order(s) for such excess BCG Requirements on a timely basis; (C) Teknika shall
not be obligated to accept any purchase orders for BCG Requirements that exceed
the binding forecasts by CancerVax, and (D) Teknika agrees to provide CancerVax
with as much advance written notice as possible (and in any case at least
thirty (30) days' written advance notice) if Teknika determines that any
scheduled delivery of BCG Requirements pursuant to any purchase order will be
delayed by more than fifteen (15) days for any reason of which Teknika becomes
aware.

         2.5      SUPPLY.

                  a)       ASSURANCE OF SUPPLY. CancerVax and Teknika will
cooperate to anticipate CancerVax's long-term BCG Requirements, and Teknika and
CancerVax will take reasonable measures to assure that CancerVax's BCG
Requirements can be met, which measures may include the maintenance of adequate
safety stocks of BCG by Teknika and CancerVax.

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                  b)       REDUCED DOSE SUPPLY. Teknika agrees that once a
Melanoma Vaccine has been approved for sale by FDA or a corresponding foreign
regulatory agency, it will, upon written request of CancerVax, use diligent
efforts to develop a reduced dosage form of Commercial Sale BCG for introduction
by CancerVax provided such development, in the opinion of Teknika, is
scientifically and commercially feasible. CancerVax would however be responsible
for the conduct and expense of all clinical trials related to the reduced dose
form of the Melanoma Vaccine.

                  c)       In the event Teknika sells, transfers or otherwise
ceases the Manufacture of BCG for any reason, other than as expressed in Section
7.6, Teknika shall use reasonable efforts to supply CancerVax with CancerVax's
best estimate of a two (2) year supply of BCG Requirements and will provide
CancerVax with reasonable prior notice of such event.

         2.6.     REGULATORY APPROVAL OF MANUFACTURING. Teknika shall be solely
responsible, at its sole cost and expense, for obtaining all necessary
regulatory approvals particular to the Manufacture and supply of BCG
Requirements, but Teknika makes no representation that BCG shall be suitable for
use in any vaccine. CancerVax shall advise Teknika of any new Specifications
required by the FDA or the Federal Food, Drug and Cosmetic Act (or the
equivalent regulatory authority or law in other countries) with respect to any
Melanoma Vaccine. Teknika shall not modify in any manner any Specifications
without CancerVax's prior written consent (which consent shall not be
unreasonably withheld); provided, however, Teknika shall not be limited in
making modifications or changes to BCG to improve the performance of BCG in its
current usages approved by the FDA. No such changes shall be implemented unless
required by the FDA without at least six (6) months' written notice to
CancerVax.

         2.7      REGULATORY FILINGS. Without limiting the generality of the
foregoing, for purposes of supporting all pre-clinical studies and human
clinical trials and all regulatory filings, applications and approvals on the
part of CancerVax with respect to any Melanoma Vaccine, Teknika hereby agrees
that on an on-going basis during the Term: (1) Teknika shall permit CancerVax to
reference Teknika's drug master file and/or Investigational New Drug
Applications (IND's) for BCG with the United States Food and Drug
Administration; (ii) to the extent not subject to the proprietary rights of
third parties, Teknika shall provide CancerVax with all pre-clinical and
clinical data, results and other relevant information with respect to BCG
(including but not limited to information regarding the toxicity, safety and
stability of BCG) that is (A) submitted by Teknika in connection with any
Investigational New Drug application or other regulatory filing with respect to
BCG from time to time during the Term or (B) otherwise in Teknika's possession
from time to time during the Term; and (iii) a Teknika representative, at
CancerVax's request, shall attend periodic meetings to discuss the progress of
clinical trials of any Melanoma Vaccines. CancerVax will reimburse Teknika for
the foregoing assistance only (i) for its reasonable out-of pocket expenses,
including but not limited to

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travel, and (ii) Teknika's fully burdened costs of performing technical studies
or engaging outside services subject to the prior approval of CancerVax.

                  a)       ADVERSE EVENTS REPORTING. On an on-going basis during
the Term and for at least ten (10) years after the expiration or termination of
this Agreement, each Party agrees to provide the other Party with any written
information in its possession which indicates adverse effects in humans
associated with BCG or any products using BCG.

         2.8      TEKNIKA RECORDKEEPING AND INSPECTION.

                  (a)      TECHNICAL RECORDS. With respect to any Manufacture
and supply of BCG Requirements, Teknika shall, at its expense, keep properly
completed technical books and records, test data and reports as required under
the Specifications and all applicable laws and regulations, including but not
limited to cGLPs or cGMPs (as appropriate), and in any case shall maintain such
technical Information for at least two (2) years from the expiration date of the
relevant Melanoma Vaccine or longer if required under applicable laws and
regulations (including but not limited to cGLPs and cGMPs, as applicable).
During regular business hours and upon reasonable advance written request,
Teknika shall make any such technical information available to CancerVax for
Inspection.

                  (b)      QUALITY AUDIT. Upon submission of a proposal by
CancerVax which is approved by Teknika, Teknika shall permit CancerVax to audit,
in cooperation with Teknika's personnel, production, packaging, and quality
control facilities of Teknika and any of its significant suppliers as they
relate to Manufacture of BCG to allow CancerVax to verify Teknika's compliance
with its responsibilities under this Agreement. All confidential information
disclosed thereunder shall be held in confidence by CancerVax in accordance with
Article 3 below.

         2.9      LIABILITY.

                  (a)      INDEMNIFICATION BY CANCERVAX. Except as otherwise
provided in Sections 2.9 (b) or (c), CancerVax will defend, indemnify and hold
harmless Teknika against any and all claims, actions, liabilities, damages,
losses, costs or expenses, including reasonable attorney's fees, based upon or
arising out of the manufacture, sales or use of any Melanoma Vaccine by
CancerVax, provided that Teknika gives CancerVax prompt notice thereof in
writing, permits CancerVax to control the investigation, preparation and defense
thereof (including any compromise or settlement thereof and any appeal) and
provides reasonable assistance to CancerVax, at CancerVax expense, in that
regard.

                  (b)      LIABILITY. Each Party assumes full responsibility and
liability for any injury, damage or expense which it or its employees, agents
and invitees incur and

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which arise from its manufacture, handling and use of BCG or Melanoma Vaccines,
except to the extent such injury, damage or expense arises from the negligence
or willful misconduct of the other Party.

                  (c)      INDEMNIFICATION BY TEKNIKA. Except as otherwise
provided in Sections 2.9 (a) or (b) Teknika will defend, indemnify and hold
harmless CancerVax against any and all claims, actions, liabilities, damages,
losses, costs or expense (including reasonable attorneys' fees) including
without limitation expenses of total or partial product recalls in connection
with the manufacture, use or sale of Melanoma Vaccines (i) based upon the gross
negligence or willful misconduct of Teknika or its employees arising out of the
Manufacture or shipment of BCG Requirements by Teknika or (ii) the failure of
Teknika to comply with governmental regulations with respect to BCG, provided
that CancerVax gives Teknika prompt notice thereof in writing, permits Teknika
to control the investigation, preparation and defense thereof (including any
compromise or settlement thereof and any appeal) and provides reasonable
assistance to Teknika, at Teknika's expense, in that regard.

3.       CONFIDENTIALITY.

         3.1.     Each party agrees to take such steps and, when necessary to
protect the rights of the other, shall cause its employees and agents and its
Affiliates employees and agents, to take such steps as are reasonably required
to protect and keep confidential, and shall not use, publicize or otherwise
disclose to third parties other than Affiliates, Confidential Information (as
defined below) of the other party, which was acquired from the other party
pursuant to this Agreement, including, without limitation, following procedures
designed to limit access of such information to those persons having a need to
know it. The parties agree not to disclose or use such Confidential Information
except as they may be entitled to do so or if necessary pursuant to or in the
performance of this Agreement.

         3.2      The obligation of confidentiality and restriction on use
imposed by the foregoing Section 3.1 shall not apply to any particular item of
Confidential Information that:

                  3.2.1    is known or generally available, or subsequently
         becomes known or generally available, to the public, or is otherwise at
         the time of disclosure or subsequently becomes part of the public
         domain, whether by printed publication or otherwise through no fault of
         the receiving parties;

                  3.2.2    the receiving party can demonstrate by competent
         evidence, based in substance upon writings and/or physical evidence,
         (i) was known to the receiving party at the time of receipt or (ii) is
         furnished to the receiving party without obligation of confidentiality
         or non-use by a third party, either before or after the time of its
         disclosure by the disclosing party, which third party is not

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         restricted by a confidential undertaking to the disclosing party at the
         time of the disclosure;

                  3.2.3    the receiving party can demonstrate by competent
         evidence, based in substance upon writings and/or physical evidence,
         has been developed independently for the receiving party by persons not
         having access to the Confidential information; or

                  3.2.4    is the Confidential Information of the disclosing
         party and that the disclosing party discloses to a non-Affiliate party
         without restriction.

         3.3      The obligations of confidentiality and restriction on use
under this Article 3 shall continue to be binding upon the parties for a period
of five years following termination of this Agreement.

         3.4      Either party may also disclose Confidential Information
disclosed to it by the other party to the extent, and only to the extent, such
disclosure is necessary for such party to comply with court orders or other due
process of law or with applicable governmental laws or regulations The party
that desires to so disclose Information shall give the other party reasonable
advance notice of any such proposed disclosure pursuant to such compliance with
law or regulation, shall use its best efforts to secure confidential treatment
of the Information thus disclosed, and shall advise the other party in writing
of the manner in which that was done.

         3.5      For purposes of this Agreement, Confidential Information shall
mean: (a) data, inventions, Information, processes, know-how, patent
applications, trade secrets and similar intellectual property rights of a party,
including, without limitation, the original and copies of all documents,
inventions, laboratory notebooks, drawings, specifications, devices, equipment,
prototype models and tangible manifestations embodying any technology disclosed
hereunder, (b) a party's customer lists and marketing, sales, costs, royalty and
similar information related to the manufacture or sale of BCG or other part of
the Parties' business, and (c) any other information disclosed in writing and
marked as "Confidential Information" or, if disclosed orally, reduced to writing
and marked as "Confidential Information" and submitted within thirty (30) days
of the original oral disclosure.

         3.6      PERMITTED DISCLOSURES. Each Party may disclose the other
Party's information to the extent such disclosure is reasonably necessary in
prosecuting or defending litigation, filing, prosecuting or maintaining patent
applications or patents, complying with applicable laws or regulations, or, in
the case of CancerVax, conducting pre-clinical or clinical trials or preparing
or filing regulatory filings with respect to Melanoma Vaccines; provided,
however, that if a Party is required to make any disclosure of the other Party's
information furnished pursuant to this Agreement, it will give reasonable
advance notice of such disclosure requirements to the other Party and,

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except to the extent inappropriate in the case of patent applications, will use
its best efforts to secure confidential treatment of such information required
to be disclosed.

4.       TERM/TERMINATION.

         4.1      TERM. The term of this Agreement shall be for one (1) year
from the Effective Date and will renew automatically for successive 12 month
periods unless sooner terminated as provided in this Article 4.

         4.2      MATERIAL BREACH. Subject to Section 7.6, failure by either
Party to comply with any of the material obligations contained in this Agreement
shall entitle the other Party to give to the Party in default notice specifying
the nature of the default and requiring it to make good such default. If such
default is not cured within sixty (60) days after the receipt of such notice,
the notifying Party shall be entitled, without prejudice to any of its other
rights conferred on it by this Agreement and in addition to any other remedies
available to it by law or in equity, to terminate this Agreement effective upon
written notice to the other Party. The right of a Party to terminate this
Agreement, as herein above provided, shall not be affected in any way by its
waiver or failure to take action with respect to any previous default.

         4.3      INSOLVENCY OR BANKRUPTCY. Either Party may, in addition to any
other remedies available to it by law or in equity, terminate this Agreement, in
whole or in part as the terminating Party may determine, effective upon written
notice to the other Party, in the event the other party shall have become
insolvent or bankrupt, or shall have made an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of the other
Party for all or a substantial part of its property, or any case or proceeding
shall have been commenced seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts or any other
relief under any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, or there shall have been
issued a warrant of attachment, execution, disdain or similar process against,
any substantial part of the property of the other Party, and any such event
shall have continued for sixty (60) days undismissed, unbounded and
undischarged.

         4.4      ACCRUED RIGHTS, SURVIVING OBLIGATIONS: PARTNERS. Expiration or
any termination of this Agreement for any reason shall be without prejudice to
any rights which shall have accrued to the benefit of either Party prior to such
expiration or termination. Such expiration or termination shall not relieve
either Party from obligations which are expressly indicated to survive
expiration or termination of this Agreement, which obligations include, without
limitation, those under Sections 2.8 or 2.9, or Articles 3, 5 and 6.

         4.5      Termination. In the event CancerVax ceases to produce the
Melanoma Vaccine and does not purchase BCG from Teknika pursuant to this
Agreement for

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ninety (90) days, either Party shall have the right to terminate this Agreement
upon thirty (30) days written notice to the other. In the event CancerVax does
not purchase its full BCG Requirements from Teknika, or fails to purchase any
BCG for a period of six (6) months, Teknika may terminate this Agreement upon
written notice to CancerVax.

5.       TEKNIKA REPRESENTATIONS AND WARRANTIES.

         5.1      Teknika represents and warrants that:

                  (a)      the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly authorized by
Teknika;

                  (b)      the performance by Teknika of any of the terms and
conditions of this Agreement on its part to be performed does not and will not
constitute a breach or violation of any other agreement or understanding,
written or oral, to which it is a party;

                  (c)      To the best of Teknika's knowledge, there are no
adverse proceedings, claims or actions pending, or threatened, relating to BCG
and at the time of disclosure and delivery thereof to CancerVax and Teknika
shall have the full right and legal capacity to disclose and deliver BCG without
violating the rights of third parties.

         5.2      DISCLAIMER. EXCEPT AS EXPRESSLY WARRANTED HEREIN, TEKNIKA
MAKES NO WARRANTIES AS TO BCG OR BCG REQUIREMENTS. TEKNIKA HEREBY DISCLAIMS ALL
IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES AS TO MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. Teknika does not warrant the suitability of
BCG for use in connection with any vaccine prepared by CancerVax and CancerVax
acknowledges that it relies on its own judgment in determining the suitability
of BCG Manufactured by Teknika for such purpose. Notwithstanding any other terms
of this Agreement, Teknika shall not be liable to CancerVax for any incidental,
special or consequential damages arising out of or in connection with the
Manufacture, use or supply of BCG by Teknika under this Agreement.

6.       ARBITRATION.

         Any dispute, controversy or claim between the Parties, arising out of
or relating to this Agreement or the Parties' respective rights and obligations
hereunder either during or after the Term (including the question as to whether
any such matter is arbitrable) shall be subject to binding arbitration in
accordance with then-existing commercial arbitration rules of the American
Arbitration Association. The Parties agree that, in the course of any such
arbitration, service of any notice at their respective addresses in accordance
with Section 7.11 of this Agreement shall be valid and sufficient, and any
arbitration hereunder shall be in the jurisdiction of the defendant Party, which
in the case of CancerVax shall be California and in the case of Teknika

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shall be North Carolina. In any such arbitration, an award shall be rendered by
a majority of the members of a board of arbitration consisting of three (3)
members, one (1) of whom shall be chosen by each of CancerVax and Teknika and
the third of whom shall be appointed by mutual agreement of such two (2)
arbitrators. In the event of failure of such two (2) arbitrators to agree within
sixty (60) days after the commencement of arbitration (as defined below) upon
appointment of the third arbitrator, or, in the event that either Party shall
fail to appoint an arbitrator within thirty (30) days after the commencement of
the arbitration proceedings, the third arbitrator or (upon request of the other
Party) the second arbitrator and the third arbitrator, as the case may be, shall
be appointed by the American Arbitration Association in accordance with its then
existing commercial arbitration rules. For purposes of this Section, the
"commencement of the arbitration proceeding" shall mean the date upon which the
defendant Party receives from the American Arbitration Association a copy of the
request for arbitration filed by the Party desiring to have recourse to
arbitration. The decision of the arbitrators shall be in writing and shall set
forth the basis therefor. The Parties shall abide by all awards rendered in
arbitration proceedings, and such awards may be enforced and executed upon in
any court having jurisdiction over the Party against whom enforcement of such
award is to be sought. The Parties shall divide equally the administrative
charges, arbitrators' fees, and related expenses of arbitration, but each Party
shall pay its own legal fees incurred in connection with any such arbitration;
provided, however, if the arbitrators determine that one Party prevailed clearly
and substantially over the other Party, then the non-prevailing Party shall also
pay the reasonable attorneys' fees and expert witness costs and other
arbitration costs of the prevailing Party.

7.       MISCELLANEOUS PROVISIONS.

         7.1      NO PARTNERSHIP. Nothing in this Agreement is intended or shall
be deemed to constitute a partnership, distributorship, agency employer-employee
or joint venture relationship between the Parties. No Party shall incur any
debts or make any commitments for the other, except to the extent, if at all,
specifically provided herein.

         7.2      ASSIGNMENTS. Neither Party shall assign any of its rights or
obligations hereunder or this Agreement, except that either Party may do so: (a)
as incident to the merger, consolidation, reorganization or acquisition of stock
or assets affecting substantially all of the assets or voting control of such
Party; (b) to any Affiliate, if such Party remains liable and responsible for
the performance and observance of all of the Affiliate's duties and obligations
hereunder; (c) with the prior written consent of the other Party; or (d) as
incident to an agreement between CancerVax and a major corporate partner, who is
not a competitor to Teknika in any other FDA-approved applications of BCG. This
Agreement shall be binding upon the successors and permitted assigns of the
Parties and the name of a Party appearing herein shall be deemed to include the
names of such Party's successors and permitted assigns to the extent necessary
to

                                     Page 12

<PAGE>

carry out the intent of this Agreement. Any assignment not in accordance with
this Section 7.2 shall be void.

         7.3      FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

         7.4      NO NAME OR TRADEMARK RIGHTS. Except as otherwise provided
herein, no right, express or implied, is granted by this Agreement to use in any
manner the names Teknika" or "CancerVax" or any contraction thereof or any other
trade name or trademark of Teknika (including Tice) or CancerVax in connection
with the performance of this Agreement.

         7.5      PUBLIC ANNOUNCEMENT. Except as may otherwise be required by
applicable law or regulation, neither Party shall make any public announcement
concerning this Agreement or the subject matter hereof without the prior written
consent of the other Party (not to be unreasonably withheld).

         7.6      FORCE MAJEURE. If any default or delay occurs which prevents
or materially impairs a Party's performance and is due to a cause beyond the
Party's reasonable control, including but not limited to any act of any god or
demon, flood, fire, explosion, earthquake, casualty, accident, war, revolution,
civil commotion, blockade or embargo, injunction, law, proclamation, order,
regulation or governmental demand, the affected Party promptly shall notify the
other Party in writing of such cause and shall exercise diligent efforts to
resume performance under this Agreement as soon as possible. Neither Party shall
be liable to the other Party for any loss or damage due to such cause. Neither
Party may terminate this Agreement because of such default or delay.

         7.7      ENTIRE AGREEMENT OF THE PARTIES: AMENDMENTS. This Agreement,
including the exhibits attached hereto which are incorporated herein,
constitutes and contains the entire understanding and agreement of the Parties
and cancels and supersedes any and all prior negotiations, correspondence,
understandings and agreements, whether verbal or written, between the Parties
respecting the subject matter hereof. No waiver, modification or amendment of
any provision of this Agreement shall be valid or effective unless made in
writing and signed by a duly authorized officer of each of the Parties.

         7.8      SEVERABILITY. In the event that any of the provisions of this
Agreement shall for any reason be held by any court or authority of competent
jurisdiction to be invalid, illegal or unenforceable, such provision or
provisions shall be validly reformed to as nearly as possible approximate the
intent of the Parties and, if unreformable, shall be divisible and deleted in
such jurisdiction; elsewhere, this Agreement shall not be

                                     Page 13

<PAGE>

affected so long as the Parties are still able to realize the principal benefits
bargained for in this Agreement.

         7.9      CAPTIONS. The captions to this Agreement are for convenience
only, and are to be of no force or effect in construing or interpreting any of
the provisions of this Agreement.

         7.10     APPLICABLE LAW. This Agreement shall be governed by and
interpreted for all purposes in accordance with the laws of North Carolina.

         7.11     NOTICE. All notices and other communications shall be deemed
to have been duly given when delivered in person or by registered or certified
mail (postage prepaid, returned receipt requested) to the respective parties as
follows:

         If to CancerVax:

          CancerVax, Inc.
          802 84th Avenue NE
          Medina, Washington 98039

         If to Teknika:

          Organon Teknika Corporation
          100 Akzo Avenue
          Durham, North Carolina 27712
          Attn: President

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective corporate officers, duly authorized as of the day and
year first above written.

ORGANON TEKNIKA CORPORATION                    CANCERVAX, INC.

By: /s/ Lloyd R. Moores                        By: /s/ Mark E. Lostrom
  ---------------------------                     ------------------------------
Name: Lloyd R. Moores                          Name: Mark E. Lostrom
Title: SR VP.                                  Title: ACTING PRESIDENT

 By: /s/ Robert S. Timmins
    ------------------------------
 Name: Robert S. Timmins
 Title: President

                                     Page 14<PAGE>
                                                                  EXHIBIT 10.1

                        MICHIGAN HERITAGE BANCORP, INC.

                        1997 EMPLOYEE STOCK OPTION PLAN

                                    -------

                          Effective January 15, 1997
<PAGE>
                        MICHIGAN HERITAGE BANCORP, INC.

                        1997 EMPLOYEE STOCK OPTION PLAN

     Subject to shareholder approval, effective January 15, 1997, the plan
described herein is hereby adopted as the Michigan Heritage Bancorp, Inc. 1996
Employee Stock Option Plan (the "Plan").

     1.   Purpose. The purpose of this Plan is to promote the best interests of
the Corporation and its shareholders by encouraging Employees of the Corporation
to acquire a proprietary interest in the Company through the grant of Options,
thus identifying their interests with those of shareholders and encouraging
Employees to make greater efforts on behalf of the Corporation to achieve its
long-term business plans and objectives.

     2.    Definitions. As used in this Plan, the following terms have the
meaning described below:

          (a)  "Agreement" means the written agreement that sets forth the
     terms of a Participant's Option.

          (b)  "Board" means the Board of Directors of the Corporation.

          (c)  "Change in Control" means the occurrence of any of the following
     events:

               (i)  If any "person" (as such term is used in Sections 13(d) and
          14(d) of the Exchange Act), or group of persons acting in concert,
          other than the Corporation, a Subsidiary or an employee benefit plan
          or employee benefit plan trust maintained by the Corporation or a
          Subsidiary, becomes the "beneficial owner" (as such term is defined in
          Rule 13d-3 of the Exchange Act, except that a person also shall be
          deemed the beneficial owner of all securities which such person may
          have a right to acquire, whether or not such right is presently
          exercisable), directly or indirectly, of securities of the Corporation
          representing fifty (50%) or more of the combined voting power of the
          Corporation's then outstanding securities ordinarily having the right
          to vote in the election of directors; or

               (ii)  A liquidation or dissolution of the Corporation, sale of
          substantially all of the assets of the Corporation, or a merger,
          consolidation or combination in which the Corporation is not the
          survivor; or

               (iii) The addition of new members to the Board within any
          consecutive twenty-four (24) month period, which members constitute a
          majority of the Board, unless a majority of the Board consists of
          incumbent members of the
<PAGE>
          Board in office prior to the commencement of such twenty-four (24)
          month period, plus new members who were recommended or appointed by a
          majority of the incumbent directors in office immediately prior to the
          addition of such new members to the Board.

          (d)   "Code" means the Internal Revenue Code of 1986, as amended.

          (e)   "Committee" means the Compensation Committee of the Board of
     Directors, consisting of two or more disinterested members of the Board, as
     defined in Rule 16b-3 of the Exchange Act (i.e., a director who is not,
     during the one year prior to service as a member of the Committee, or
     during such service, granted or awarded securities pursuant to this Plan or
     any other plan of the Corporation or any of its affiliates), who have been
     appointed by the Board to act as the committee for purposes of
     administering this Plan.

          (f)   "Common Stock" means shares of the Corporation's authorized
     Common Stock.

          (g)   "Corporation" means Michigan Heritage Bancorp, Inc., a Michigan
     corporation.

          (h)   "Disability" means total and permanent disability, as defined in
     Section 22(e) of the Code.

          (i)   "Employee" means a salaried employee of the Corporation or
     Subsidiary who has an "employment relationship" with the Corporation or a
     Subsidiary, as defined in Treasury Regulation 1.421-7(h) and who is either
     an executive officer of the Company or a director of one of the Company's
     principal departments (but does not mean a member of the Committee), and
     the term "employment" means employment with the Corporation or a Subsidiary
     of the Corporation.

          (j)   "Exchange Act" means the Securities Exchange Act of 1934, as
     amended from time to time and any successor thereto.

          (k)   "Fair Market Value" means, for purposes of determining the value
     of Common Stock, the average of the published closing bid and asked prices
     of the Common Stock on the NASD OTC Bulletin Board (the "Bulletin Board"),
     or if the Common Stock has become listed on The Nasdaq Stock Market
     ("Nasdaq"), then on Nasdaq instead; or if the Common Stock is not quoted on
     either the Bulletin Board or Nasdaq, a value determined by any fair and
     reasonable means prescribed by the Committee.

          (l)   "Grant Date" means the date on which the Committee authorizes an

                                       2
<PAGE>
     individual Option or such later date as shall be designated by the
     Committee.

          (m)   "Incentive Stock Option" means an Option that is intended to
     meet the requirements of Section 422 of the Code.

          (n)   "Initial Offering Price" means the price per share of Common
     Stock received by the Company, excluding any underwriters' fees or
     commissions in connection with its initial public offering of Common
     Stock.

          (o)   "Nonqualified Stock Option" means an Option that is not intended
     to constitute an Incentive Stock Option.

          (p)   "Option" means either an Incentive Stock Option or a
     Nonqualified Stock Option.

          (q)   "Option Agreement" means either or both of an Incentive Stock
     Option Agreement between a Participant and the Corporation relative to
     the grant of an Option as described in Section 6(a) of this Plan.

          (r)   "Participant" means an Employee designated by the Committee to
     participate in this Plan.

          (s)   "Retirement" means termination of a Participant's employment
     under the terms of the Corporation's profit sharing plan.

          (t)   "Subsidiary" means a corporation of which at least fifty-one
     percent (51%) of the outstanding voting stock is owned by the Company,
     either directly or indirectly through one or more other Subsidiaries.

     3.   Administration. This Plan shall be administered by the Committee, in
accordance with Rule 16b-3 of the Exchange Act. The Committee shall interpret
this Plan, prescribe, amend, and rescind rules and regulations relating to this
Plan, and make all other determinations necessary or advisable for the
administration of this Plan. The Committee will make determinations with respect
to the officers and other key employees who will participate in the Plan and the
extent of their participation, including the type of option. In making such
determinations, the Committee may consider the position and responsibilities of
the employee, the nature and value of his or her services and accomplishments,
the present and potential contribution of the employee to the success of the
Company, and such other factors as the Committee may deem relevant. The decision
of the Committee on any question concerning the interpretation of this Plan or
any Option granted under this Plan shall be final and binding upon all
Participants.

     4.   Participants. Participants in this Plan shall be such Employees
(including

                                       3
<PAGE>
Employees who are directors) of the Corporation and its Subsidiaries as the
Committee may select from time to time. The Committee may grant Options to an
individual upon the condition that the individual become an Employee of the
Corporation or of a Subsidiary, provided that the Option award shall be deemed
to be granted only on the date that the individual becomes an Employee.

     5.   Stock.  Subject to adjustment as provided in Section 9, the total
number of shares of Common Stock available for grants of Options under this Plan
shall be forty thousand (40,000). Shares subject to any unexercised portion of a
terminated, cancelled or expired Option granted hereunder may again be
subjected to grants under this Plan.

     6.   Grant of Options.

          (a)   Terms and Conditions; Designations. The Committee, at any time
     and from time to time, subject to the terms and conditions of this Plan,
     may grant Options to such Employees and for such number of shares of Common
     Stock as it shall designate. The Committee shall determine the general
     terms and conditions of exercise, including any applicable vesting
     requirements, and the Committee may designate any Option granted as either
     an Incentive Stock Option or a Nonqualified Stock Option, or may designate
     a portion of an Option as an Incentive Stock Option or a Nonqualified Stock
     Option. Each grant of an Option shall be evidenced by an Incentive Stock
     Option Agreement or a Nonqualified Stock Option Agreement, as the case may
     be, which shall specify the applicable terms and conditions and
     designations relative to such grant as determined by the Committee. Each
     Option granted under this Plan shall meet all of the terms and conditions
     of this Plan, except that an Incentive Stock Option shall comply with the
     additional requirements of Section 6(b) below.

          (b)   Additional Requirements of Incentive Stock Options. Any Option
     intended to constitute an Incentive Stock Option shall meet all of the
     terms and conditions of this Plan and, in addition, shall comply with all
     of the following requirements of this Section 6(b):

               (i)   No Incentive Stock Option shall be granted with an exercise
          price below its Fair Market Value on the Grant Date or with an
          exercise term that extends beyond ten (10) years from the Grant Date.

               (ii)  An Incentive Stock Option shall not be granted to any
          Participant who owns (within the meaning of Section 424(d) of the
          Code) stock of the Corporation or any Subsidiary possessing more than
          ten percent (10%) of the total combined voting power of all classes of
          stock of the Corporation or a Subsidiary unless, at the Grant Date,
          the exercise price for the Option is at least one hundred ten percent
          (110%) of the Fair Market Value of the shares subject to the Option
          and the Option, by its terms, is not exercisable more than five (5)
          years after the Grant Date.

                                       4
<PAGE>
           (iii) The aggregate Fair Market Value of the underlying Common Stock
          (determined at the Grant Date) as to which Incentive Stock Options
          granted under this Plan (including a plan of a Subsidiary) may first
          be exercised by a Participant in any one calendar year shall not
          exceed one hundred thousand dollars ($100,000). To the extent that an
          Option intended to constitute an Incentive Stock Option shall violate
          the foregoing one hundred thousand dollar ($100,000) limitation, the
          portion of the Option that exceeds the one hundred thousand dollar
          ($100,000) limitation shall be deemed to constitute a Nonqualified
          Stock Option.

          (c)   Option Price. The Committee shall determine the Option price per
     share for each Option granted under this Plan. The option price will not be
     less than the Fair Market Value of the shares of Common Stock at the time
     the option is granted except in the case of an incentive stock option
     granted to a 10% shareholder where the option price will be equal to 110%
     of Fair Market Value; provided that for all Options granted during the 12
     month period following an initial public offering of Common Stock by the
     Company, the Option price shall not be less than the Initial Offering
     Price. The option price shall be paid in cash or through the delivery of
     previously owned shares of the Company's Common Stock, or by a
     combination of cash and Common Stock.

          (d)   Notice of Exercise and Payment.

               (i)   A Participant shall exercise an Option by delivery to the
          Corporation of a notice of exercise in substantially the form set
          approved by the Committee.

            (ii)  The purchase price for shares of Common Stock to be acquired
          upon exercise of an Option granted hereunder shall be paid in full in
          cash or by personal check, bank draft or money order at the time of
          exercise; provided, however, that in lieu of such form of payment a
          Participant may pay such purchase price in whole or in part by
          tendering shares of Common Stock, duly endorsed for transfer (or with
          duly executed stock powers attached), or in any combination of the
          above. Shares of Common Stock surrendered upon exercise shall be
          valued at Fair Market Value on the business day preceding the date on
          which the certificate(s) for such shares, duly endorsed for transfer
          or accompanied by appropriate stock powers, are surrendered to the
          Corporation. Participants who are subject to short swing profit
          restrictions under the Exchange Act and who exercise an Option by
          tendering previously-acquired shares shall do so only in accordance
          with the provisions of Rule 16b-3 of the Exchange Act. Notwithstanding
          the foregoing, any Option shall be deemed exercised by delivery to the
          Corporation of a properly executed exercise notice, acceptable to the
          Corporation, together with irrevocable instructions to the
          Participant's broker to

                                       5
<PAGE>
          deliver to the Corporation sufficient cash to pay the exercise price
          and any applicable income and employment withholding taxes, in
          accordance with a written agreement between the Corporation and the
          brokerage firm ("cashless exercise procedure").

          (e)   Acceleration of Exercise of Option. The Committee, in its sole
     discretion, may accelerate the time at which any option may be exercised in
     whole or in part.

     7.   Termination of Employment.

          (a)  Options.

               (i)   If, prior to the date that an Option first becomes
          exercisable, a Participant's employment is terminated for any reason
          other than a Change in Control, the Participant's right to exercise
          the Option shall terminate and all rights thereunder shall cease.

            (ii)  In the event that the employment of an optionee to whom an
          option has been granted under the Plan shall terminate (except as set
          forth below) such option may be exercised, to the extent that the
          option was exercisable on the date of termination of employment, only
          until the earlier of three (3) months after such termination or the
          original expiration date of the option; provided however, that if
          termination of employment results from death or total and permanent
          disability, such three (3) month period shall be extended to twelve
          (12) months.

            (iii) The Committee, at the time of a Participant's termination of
          employment, may, in its sole discretion, accelerate the term of an
          Option or extend the exercise period of an Option.

     8.   Adjustments. The total amount of Common Stock for which Options may be
granted under this Plan, and the number of shares subject to any such grants
(both as to the number of shares of Common Stock and the Option price), shall be
appropriately adjusted for any increase or decrease in the number of
outstanding shares of Common Stock resulting from payment of a stock dividend on
Common Stock, a subdivision or combination of shares of Common Stock, a stock
split, a recapitalization or otherwise. The foregoing adjustments and the manner
of application of the foregoing provisions shall be determined by the Committee
in its sole discretion. Any such adjustment may provide for the elimination of
any fractional share which might otherwise become subject to an Option.

     9.   Change in Control; Golden Parachutes. Notwithstanding anything
contained herein to the contrary, upon a Change in Control, any outstanding
Option granted hereunder shall immediately become exercisable in full,
regardless of any installment provision applicable to

                                       6
<PAGE>
such Option; provided, however, that to the extent that the acceleration of a
grant is deemed to constitute a "golden parachute payment" under Section 280G of
the Code and such payment, when aggregated with other golden parachute payments
to the Participant results in an "excess golden parachute payment" under Section
280G of the Code, any accelerated payment under this Section 11 shall be reduced
to the highest permissible amount that shall not subject the Participant to an
excess golden parachute excise tax under Section 4999 of the Code and shall
entitle the Corporation to retain its full compensation tax deduction for the
payment.

     10.   Securities Laws.

     (a)   Compliance. Notwithstanding anything contained herein to the
contrary, the Corporation's obligation to sell and deliver Common Stock pursuant
to the exercise of an Option is subject to such compliance with federal and
state laws, rules and regulations applying to the authorization, issuance or
sale of securities as the Corporation deems necessary or advisable. No shares
shall be issued until counsel for the Corporation has determined that the
Corporation has complied with all requirements under appropriate securities
laws.

     (b)   Assurance of No Violation. The Corporation shall not be required to
sell and deliver Common Stock unless and until it receives satisfactory
assurance that the issuance or transfer of such shares shall not violate any of
the provisions of the Securities Act of 1933, as amended, or the Exchange Act,
or the rules and regulations of the Securities Exchange Commission promulgated
thereunder or those of the National Association of Securities Dealers, Inc. (the
"NASD") with respect to NASDAQ or any stock exchange on which the Common Stock
may be listed, the provisions of any state laws governing the sale of
securities, or that there has been compliance with the provisions of such acts,
rules, regulations and laws.

     (c)   Restrictions. The Committee may impose such restrictions on any
shares of Common Stock acquired pursuant to the exercise of an Option under this
Plan as it may deem advisable, including, without limitation, restrictions (i)
under applicable federal securities laws, (ii) under the requirements of the
NASD with respect to NASDAQ or any stock exchange or other recognized trading
market upon which such shares of Common Stock are then listed or traded, and
(iii) under any blue sky or state securities laws applicable to such shares.
Notwithstanding any other provision of this Plan, the Committee may impose such
conditions on the exercise of an Option as may be required to satisfy the
requirements of Rule 16b-3 of the Exchange Act.

     11.   Withholding Taxes--Nonqualified Stock Options.

     (a)   Corporation's Right to Withhold; Use of Previously-Acquired Shares
and Cashless Exercise Procedure. The Corporation shall have the right to
withhold from a Participant's compensation or require a Participant to remit
sufficient funds to satisfy applicable withholding for income and employment
taxes upon the exercise of a Nonqualified Stock Option. A Participant may make a
written election to tender previously-acquired shares of

                                       7
<PAGE>

Common Stock or have shares of Common Stock withheld from the exercise,
provided that the shares have an aggregate Fair Market Value sufficient to
satisfy in whole or in part the applicable withholding taxes.  The cashless
exercise procedure of Section 6(d)(ii) may be utilized to satisfy the
withholding requirements related to the exercise of a Nonqualified Stock
Option.

     (b)   Insider Trading Restrictions.  Except as permitted under Rule 16b-3
of the Exchange Act, a Participant subject to the insider trading restrictions
of Section 16(b) of the Exchange Act may use Common Stock to satisfy the
applicable withholding requirements only if notice of election to exercise is
given to the Committee within the ten (10) day "window periods" set forth in
Rule 16b-3, or if such election is made at least six months prior to the date
on which the exercise of the Nonqualified Stock Option.  Any election by a
Participant to utilize Common Stock for withholding purposes is subject to the
discretion of the Committee.

     12.   Termination and Amendment.  The Board may terminate this Plan, or
the granting of Options under this Plan, at any time.  An option may not be
granted pursuant to the Plan after December 31, 2006.  The Board of Directors
may from time to time terminate the Plan or amend the Plan subject to
shareholder approval to the extent necessary to satisfy the requirements of
Rule 16b-3 under the Exchange Act, or any successor rule.  The Board may amend
or modify this Plan at any time and from time to time, but no amendment or
modification, without the approval of the shareholders of the Corporation,
shall (a) materially increase the benefits accruing to Participants under this
Plan, (b) increase the amount of Common Stock for which grants and awards may
be made under this Plan, except as permitted under Section 11 hereof, or (c)
change the provisions relating to the eligibility of individuals to whom grants
and awards may be made under this Plan.  No amendment, modification, or
termination of this Plan shall in any manner affect any Option granted under
this Plan without the consent of the Participant holding the Option.

     13.   Miscellaneous.

     (a)   Partial Exercise; No Fractional Shares.  The Committee may permit,
and shall establish procedures for, the partial exercise of Options granted
under this Plan, provided that no fractional shares of Common Stock shall be
issued upon exercise of an Option.

     (b)   Rights Prior to Issuance of Shares.  No Participant shall have any
rights as a shareholder with respect to shares covered by an Option until the
issuance of a stock certificate for such shares.  No adjustment shall be made
for dividends or other rights with respect to such shares for which the record
date is prior to the date the certificate is issued.

     (c)   Non-Assignability.  No Option shall be transferable by a Participant
except by will or the laws of descent and distribution.  During the lifetime of
a Participant, an Option shall be exercised only by the Participant.  Any
transferee of an Option shall take the same subject to the terms and conditions
of this Plan and the related Agreement.  No transfer of an Option by

                                       8
<PAGE>

will or the laws of descent and distribution shall be effective to bind the
Corporation unless the Corporation shall have been furnished with written
notice thereof and with a copy of the will and/or such other evidence as the
Corporation may deem necessary to establish the validity of the transfer and
the acceptance by the transferee of the terms and conditions of the Option.

     (d)    Effect on Employment.  Neither the adoption of this Plan nor the
granting of any Option pursuant to this Plan shall be deemed to confer on any
person any right to continue in the employ of the Company or a Subsidiary or to
continue to perform services for the Company or a Subsidiary or interferes in
any way with the right of the Company or a Subsidiary to terminate such
person's service as an officer or employee at any time.

     (e)    Use of Proceeds.  The proceeds received from the sale of Common
Stock pursuant to this Plan will be used for general corporate purposes of the
Corporation.

     (f)    Captions.  The captions and headings of the sections and the
subsections have been inserted as a matter of convenience and reference only
and shall not control or affect the meaning or construction of this Plan.

     14.    Approval of Plan.  This Plan shall be subject to the approval of
the holders of at least a majority of the Common Stock of the Corporation
present and entitled to vote at a meeting of shareholders of the Corporation
held within twelve (12) months after adoption of this Plan by the Board.  No
Option granted under this Plan may be exercised in whole or in part until this
Plan has been approved by the shareholders as provided herein.  If not approved
by shareholders within such twelve (12) month period, this Plan and any Options
granted hereunder shall be rescinded.

BOARD APPROVAL:  January 15, 1997

SHAREHOLDER APPROVAL:  January 15, 1997

                                       9

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