Stock Option Agreement - China Broadband Corp.


                              CHINA BROADBAND CORP.

                                 2000 STOCK PLAN

                             STOCK OPTION AGREEMENT


         Unless  otherwise  defined herein,  the terms defined in the 2000 Stock
Plan shall have the same defined meanings in this Stock Option Agreement.

I.       NOTICE OF STOCK OPTION GRANT
         ----------------------------

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

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

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



         The undersigned  Optionee has been granted an Option to purchase Common
Stock of the Company,  subject to the terms and  conditions of the Plan and this
Option Agreement, as follows:

         Grant Number                       ____________________________________

         Date of Grant                      ____________________________________

         Vesting Commencement Date          ____________________________________

         Exercise Price per Share           $___________________________________

         Total Number of Shares Granted     ____________________________________

         Total Exercise Price               $___________________________________

         Type of Option:                    ____   Incentive Stock Option

                                              X    Nonstatutory Stock Option
                                            ----

         Term/Expiration Date:              ____________________________________

         Vesting Schedule:
         ----------------


         This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:





         1.   twenty five percent  (25%) of the total  number of Shares  granted
              under the  Option  shall  vest  after  one (1) year of  Continuous
              Status  as  an  Employee  or  Consultant;

         2.   and the remaining seventy-five percent (75%) of the Shares granted
              under the Option shall vest pro rata monthly,  on the same date of
              the month as the date of grant of the option,  over the  following
              thirty-six  (36)  months of  Continuous  Status as an  Employee or
              Consultant.

         Termination Period:
         ------------------

         This Option shall be  exercisable  for three (3) months after  Optionee
ceases to be a Service  Provider.  Upon  Optionee's  death or  Disability,  this
Option may be exercised for one (1) year after  Optionee  ceases to be a Service
Provider.   In  no  event  may   Optionee   exercise   this  Option   after  the
Term/Expiration Date as provided above.

II.      AGREEMENT
         ---------

         1.  Grant of Option.  The Plan  Administrator of the Company hereby
             ---------------
grants to the Optionee named in the Notice of Stock Option Grant (the "Notice of
Grant"),  an Option to purchase  the number of Shares set forth in the Notice of
Grant,  at the  Exercise  Price per Share set forth in the Notice of Grant,  and
subject to the terms and conditions of the Plan, which is incorporated herein by
reference.  Subject  to  Section  10.4 of the Plan,  in the event of a  conflict
between  the terms and  conditions  of the Plan and this Option  Agreement,  the
terms and conditions of the Plan shall prevail.

         If  designated  in the  Notice of Grant as an  Incentive  Stock  Option
("ISO"),  this  Option is intended to qualify as an  Incentive  Stock  Option as
defined in Section 422 of the Code. Nevertheless,  to the extent that it exceeds
the  $100,000  rule of Code  Section  422(d),  this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

         2.  Exercise of Option.
             ------------------

             (a) Right to  Exercise.  This  Option  shall be  exercisable during
                 ------------------
its term in accordance with the Vesting  Schedule set out in the Notice of Grant
and with the applicable provisions of the Plan and this Option Agreement.

             (b)  Method of Exercise.  This Option shall be exercisable by deli-
                  ------------------
very of an  exercise  notice in the form  attached  as Exhibit A (the  "Exercise
Notice")  which shall state the election to exercise  the Option,  the number of
Shares  with  respect  to which the  Option is being  exercised,  and such other
representations  and agreements as may be required by the Company.  The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised  Shares.  This Option shall be deemed to be exercised  upon receipt by
the Company of such fully executed Exercise Notice  accompanied by the aggregate
Exercise Price.

             No Shares shall be issued  pursuant  to the  exercise  of an Option
unless such issuance and such exercise  complies with Applicable Laws.  Assuming
such  compliance,  for  income  tax  purposes  the  Shares  shall be  considered
transferred  to the Optionee on the date on which the Option is  exercised  with
respect to such Shares.


                                      -2-





         3.  Optionee's Representations.  In the event the Shares have not been
             --------------------------
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company,  concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment  Representation  Statement in the form attached hereto as Exhibit
B.

         4.  Lock-Up  Period.  Optionee hereby agrees that, if so requested by
             ---------------
the  Company  or  any   representative   of  the  underwriters   (the  "MANAGING
UNDERWRITER")  in  connection  with  any  registration  of the  offering  of any
securities of the Company under the Securities  Act,  Optionee shall not sell or
otherwise  transfer  any Shares or other  securities  of the Company  during the
180-day  period  (or such  other  period as may be  requested  in writing by the
Managing  Underwriter  and  agreed to in writing by the  Company)  (the  "MARKET
STANDOFF  PERIOD")  following the effective date of a registration  statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first  registration  statement of the Company to become  effective under the
Securities  Act that includes  securities to be sold on behalf of the Company to
the public in an  underwritten  public  offering under the  Securities  Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         5.  Method of Payment. Payment of the aggregate Exercise Price shall be
             -----------------
by any of the  following,  or a  combination  thereof,  at the  election  of the
Optionee:

             (a) cash or check;

             (b) consideration received by the Company under a formal cashless
exercise  program  adopted by the Company in  connection  with the Plan;  or

             (c) surrender  of other  Shares  which, (i) in the  case of  Shares
acquired  upon  exercise of an option,  have been owned by the Optionee for more
than six (6) months on the date of surrender,  and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate  Exercise Price of the Exercised
Shares.

         6.  Restrictions on Exercise. This Option may not be exercised until
             ------------------------
such time as the Plan has been approved by the  shareholders of the Company,  or
if the  issuance of such  Shares upon such  exercise or the method of payment of
consideration  for such shares would  constitute  a violation of any  Applicable
Law.

         7.  Non-Transferability  of Option.  This Option may not be transferred
             ------------------------------
in any manner  otherwise than by will or by the laws of descent or  distribution
and may be exercised during the lifetime of Optionee only by Optionee. The terms
of the Plan and this  Option  Agreement  shall be  binding  upon the  executors,
administrators, heirs, successors and assigns of the Optionee.

         8.  Term of Option.  This Option may be exercised only within the term
             --------------
set out in the Notice of Grant,  and may be  exercised  during such term only in
accordance with the Plan and the terms of this Option.

         9.  Tax Consequences.  et forth below is a brief summary as of the date
             ----------------
of this  Option of some of the  federal  tax  consequences  of  exercise of this
Option and disposition of the Shares.


                                      -3-





THIS SUMMARY IS NECESSARILY  INCOMPLETE,  AND THE TAX LAWS AND  REGULATIONS  ARE
SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE  EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

             (a) Exercise of NSO. There may be a regular federal income tax
                 ---------------
liability  upon the exercise of an NSO.  The Optionee  will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess,  if any, of the Fair Market  Value of the Shares on the date of exercise
over the Exercise  Price. If Optionee is an Employee or a former  Employee,  the
Company will be required to withhold  from  Optionee's  compensation  or collect
from Optionee and pay to the  applicable  taxing  authorities  an amount in cash
equal to a percentage of this compensation  income at the time of exercise,  and
may  refuse  to  honor  the  exercise  and  refuse  to  deliver  Shares  if such
withholding amounts are not delivered at the time of exercise.

             (b) Exercise of ISO. If this Option qualifies as an ISO,  there
                 ---------------
will be no regular federal income tax liability upon the exercise of the Option,
although the excess,  if any, of the Fair Market Value of the Shares on the date
of exercise  over the  Exercise  Price will be treated as an  adjustment  to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.

             (c) Disposition  of  Shares.  In the case of an NSO,  if Shares are
                 -----------------------
held for at least one year,  any gain realized on disposition of the Shares will
be treated as long-term  capital gain for federal  income tax  purposes.  In the
case of an ISO,  if Shares  transferred  pursuant  to the Option are held for at
least one year after exercise and of at least two years after the Date of Grant,
any gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes.  If Shares  purchased under an ISO
are  disposed  of within one year after  exercise or two years after the Date of
Grant,  any gain realized on such  disposition  will be treated as  compensation
income  (taxable  at  ordinary  income  rates) to the  extent of the  difference
between the  Exercise  Price and the lesser of (1) the Fair Market  Value of the
Shares  on the date of  exercise,  or (2) the  sale  price  of the  Shares.  Any
additional gain will be taxed as capital gain, short-term or long-term depending
on the period that the ISO Shares were held.

             (d) Notice of Disqualifying  Disposition of ISO Shares. If the
                 --------------------------------------------------
Option granted to Optionee  herein is an ISO, and if Optionee sells or otherwise
disposes  of any of the  Shares  acquired  pursuant  to the ISO on or before the
later of (1) the date two (2) years after the Date of Grant, or (2) the date one
year after the date of  exercise,  the  Optionee  shall  immediately  notify the
Company in writing of such  disposition.  Optionee  agrees that  Optionee may be
subject to income tax  withholding  by the  Company on the  compensation  income
recognized by the Optionee.

         10. Entire  Agreement;  Governing  Law.  The  Plan is  incorporated
             ----------------------------------
herein by reference.  The Plan and this Option  Agreement  constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their  entirety  all prior  undertakings  and  agreements  of the Company and
Optionee  with  respect to the subject  matter  hereof,  and may not be modified
adversely to the Optionee's  interest except by means of a writing signed by the
Company and  Optionee.  This  agreement  is governed by the laws of the State of
Washington.


                                      -4-





         11. No Guarantee of Continued  Service.  OPTIONEE  ACKNOWLEDGES AND
             ----------------------------------
AGREES THAT THE VESTING OF SHARES  PURSUANT  TO THE VESTING  SCHEDULE  HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE  PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED,  BEING  GRANTED THIS OPTION OR ACQUIRING  SHARES
HEREUNDER).  OPTIONEE FURTHER  ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,  THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT  CONSTITUTE  AN EXPRESS OR IMPLIED  PROMISE  OF  CONTINUED  ENGAGEMENT  AS A
SERVICE  PROVIDER FOR THE VESTING PERIOD,  FOR ANY PERIOD,  OR AT ALL, AND SHALL
NOT  INTERFERE  IN ANY WAY  WITH  OPTIONEE'S  RIGHT  OR THE  COMPANY'S  RIGHT TO
TERMINATE  OPTIONEE'S  RELATIONSHIP  AS A SERVICE  PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

         Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof,  and hereby accepts
this Option  subject to all of the terms and  provisions  thereof.  Optionee has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option
Agreement and fully understands all provisions of the Option Agreement. Optionee
hereby  agrees to accept  as  binding,  conclusive  and final all  decisions  or
interpretations  of the Administrator  upon any questions arising under the Plan
or this Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.



OPTIONEE                                     CHINA BROADBAND CORP.


--------------------------------             -----------------------------------
Signature                                    By:


--------------------------------             -----------------------------------
Print Name                                   Title:


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

--------------------------------
Residence Address


                                      -5-





                                                                       EXHIBIT A
                                                                       ---------

                                 2000 STOCK PLAN

                                 EXERCISE NOTICE

China Broadband Corp.
_____________________
_____________________


Attention:  ___________


     1.   Exercise  of Option.  Effective  as of today,  ___________,  20__,
          -------------------
the  undersigned  ("OPTIONEE")  hereby elects to exercise  Optionee's  option to
purchase  ________  shares of the Common Stock (the "SHARES") of China Broadband
Corp. (the "COMPANY") under and pursuant to the 2000 Stock Plan (the "PLAN") and
the Stock Option Agreement dated ________, _____ (the "OPTION AGREEMENT").

     2.   Delivery of Payment.  Purchaser  herewith  delivers to the Company the
          -------------------
full purchase price of the Shares,  as set forth in the Option Agreement.

     3.   Representations  of  Optionee.   Optionee  acknowledges  that Optionee
          -----------------------------
has received,  read and understood the Plan and the Option  Agreement and agrees
to abide by and be bound by their terms and conditions.

     4.   Rights as Shareholder. Until the issuance of the Shares (as evidenced
          ---------------------
by the  appropriate  entry on the books of the  Company or of a duly  authorized
transfer  agent of the  Company),  no right to vote or receive  dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding  the  exercise of the Option.  The Shares shall be issued to the
Optionee as soon as  practicable  after the Option is  exercised.  No adjustment
shall be made for a dividend  or other  right for which the record date is prior
to the date of issuance except as provided in Section 9 of the Plan.

     5.   Company's  Right of First Refusal.  Before any Shares held by Optionee
          ---------------------------------
or any transferee  (either being  sometimes  referred to herein as the "HOLDER")
may be sold or otherwise transferred (including transfer by gift or operation of
law),  the  Company or its  assignee(s)  shall have a right of first  refusal to
purchase the Shares on the terms and  conditions  set forth in this Section (the
"RIGHT OF FIRST REFUSAL").

          (a)  Notice of Proposed  Transfer.  The Holder of the Shares shall
               ----------------------------
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares;  (ii) the name of
each proposed purchaser or other transferee ("Proposed  Transferee");  (iii) the
number of Shares to be  transferred  to each Proposed  Transferee;  and (iv) the
bona fide cash price or other  consideration  for which the Holder  proposes  to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).





          (b)  Exercise of Right of First Refusal. At any time within 30 days
               ----------------------------------
after receipt of the Notice,  the Company and/or its assignee(s)  may, by giving
written  notice to the Holder,  elect to purchase all, but not less than all, of
the  Shares  proposed  to be  transferred  to any one or  more  of the  Proposed
Transferees,  at the purchase price determined in accordance with subsection (c)
below.

          (c)  Purchase Price. The purchase price  ("PURCHASE  PRICE") for the
               --------------
Shares  purchased by the Company or its assignee(s)  under this Section shall be
the Offered Price. If the Offered Price includes  consideration other than cash,
the cash equivalent value of the non-cash  consideration  shall be determined by
the Board of Directors of the Company in good faith.

          (d)  Payment.  Payment of the Purchase Price shall be made,  at the
               -------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any  outstanding  indebtedness  of the Holder to the Company
(or, in the case of  repurchase  by an  assignee,  to the  assignee),  or by any
combination  thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.

          (e)  Holder's Right to Transfer.  If all of the Shares  proposed in
               --------------------------
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section,  then the Holder
may sell or otherwise  transfer such Shares to that  Proposed  Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice,  that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the  Proposed  Transferee  agrees in writing  that the  provisions  of this
Section  shall  continue  to apply to the  Shares in the hands of such  Proposed
Transferee.  If the Shares  described in the Notice are not  transferred  to the
Proposed  Transferee  within  such  period,  a new Notice  shall be given to the
Company,  and the Company and/or its assignees  shall again be offered the Right
of First  Refusal  before any Shares held by the Holder may be sold or otherwise
transferred.

          (f)  Exception  for  Certain  Family  Transfers.  Anything  to the
               ------------------------------------------
contrary contained in this Section  notwithstanding,  the transfer of any or all
of the Shares during the Optionee's  lifetime or on the Optionee's death by will
or intestacy to the  Optionee's  immediate  family or a trust for the benefit of
the  Optionee's  immediate  family shall be exempt from the  provisions  of this
Section.  "IMMEDIATE FAMILY" as used herein shall mean spouse, lineal descendant
or antecedent,  father,  mother, brother or sister. In such case, the transferee
or other recipient  shall receive and hold the Shares so transferred  subject to
the provisions of this Section,  and there shall be no further  transfer of such
Shares except in accordance with the terms of this Section.

          (g)  Termination of Right of First  Refusal.  The Right of First
               --------------------------------------
Refusal shall  terminate as to any Shares upon the first sale of Common Stock of
the Company to the general  public  pursuant to a registration  statement  filed
with and declared effective by the Securities and Exchange  Commission under the
Securities Act of 1933, as amended.

     6.   Tax Consultation.  Optionee  understands that Optionee may suffer
          ----------------
adverse tax  consequences  as a result of Optionee's  purchase or disposition of
the  Shares.  Optionee  represents  that  Optionee  has  consulted  with any tax
consultants  Optionee  deems  advisable  in  connection  with


                                      -2-





the purchase or  disposition  of the Shares and that  Optionee is not relying on
the Company for any tax advice.

     7.   Restrictive Legends and Stop-Transfer Orders.
          --------------------------------------------

          (a)  Legends.  Optionee understands  and agrees that the Company shall
               -------
cause the legends set forth below, or legends substantially  equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any  other  legends  that may be  required  by the  Company  or by state or
federal securities laws:

                  THE  SECURITIES   EVIDENCED  BY  THIS  CERTIFICATE  HAVE  BEEN
                  ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES  ACT OF 1933 (THE  "ACT")  OR ANY STATE  SECURITIES
                  LAWS.  SUCH  SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
                  OTHERWISE TRANSFERRED,  PLEDGED OR HYPOTHECATED IN THE ABSENCE
                  OF SUCH REGISTRATION OR AN OPINION OF COUNSEL  SATISFACTORY TO
                  THE  ISSUER  AND ITS  COUNSEL  THAT SUCH  REGISTRATION  IS NOT
                  REQUIRED UNDER THE ACT AND ANY STATE SECURITIES LAWS.

                  THE SHARES  REPRESENTED  BY THIS  CERTIFICATE  ARE  SUBJECT TO
                  CERTAIN  RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL
                  HELD BY THE  ISSUER  OR ITS  ASSIGNEE(S)  AS SET  FORTH IN THE
                  EXERCISE  NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
                  THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
                  OFFICE OF THE ISSUER. SUCH TRANSFER  RESTRICTIONS AND RIGHT OF
                  FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

          (b)  Stop-Transfer  Notices.  Optionee agrees that, in order to ensure
               ----------------------
compliance  with the  restrictions  referred  to herein,  the  Company may issue
appropriate  "stop  transfer"  instructions  to its transfer  agent, if any, and
that,  if the Company  transfers  its own  securities,  it may make  appropriate
notations to the same effect in its own records.

          (c)  Refusal to  Transfer.  The Company  shall not be required (i) to
               --------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the  provisions of this Exercise  Notice or (ii) to treat as
owner of such  Shares or to accord  the  right to vote or pay  dividends  to any
purchaser  or  other   transferee  to  whom  such  Shares  shall  have  been  so
transferred.

     8.   Successors  and  Assigns.  The Company  may assign any of its rights
          ------------------------
under this Exercise  Notice to single or multiple  assignees,  and this Exercise
Notice shall inure to the benefit of the  successors and assigns of the Company.
Subject to the  restrictions on transfer herein set forth,  this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors,  administrators,
successors and assigns.


                                      -3-





     9.   Interpretation.  Any dispute  regarding the  interpretation  of this
          --------------
Exercise  Notice shall be  submitted by Optionee or by the Company  forthwith to
the  Administrator  which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all parties.

     10.  Governing Law; Severability.  This Exercise Notice is governed by the
          ---------------------------
laws of the State of Washington.

     11.  Entire Agreement.  The Plan and Option Agreement are incorporated
          ----------------
herein by reference.  This Exercise  Notice,  the Plan, the Option Agreement and
the Investment  Representation  Statement constitute the entire agreement of the
parties  with  respect  to the  subject  matter  hereof and  supersede  in their
entirety all prior  undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof,  and may not be modified  adversely to the
Optionee's  interest  except by means of a writing  signed  by the  Company  and
Optionee.


Submitted by:                                Accepted by:


OPTIONEE                                     CHINA BROADBAND CORP.


-----------------------------------------    -----------------------------------
Signature                                    By


-----------------------------------------    -----------------------------------
Print Name                                   Title

Address:                                     Address:
-------                                      -------

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

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

                                             -----------------------------------
                                             Date Received


                                      -4-





                                                                       EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT


OPTIONEE:

COMPANY:          China Broadband Corp.

SECURITY:

AMOUNT:

DATE:

         In connection  with the purchase of the  above-listed  Securities,  the
undersigned Optionee represents to the Company the following:

          (a)  Optionee  is  aware  of the  Company's  business  affairs  and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. Optionee
is acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the  Securities  Act of 1933, as amended (the  "SECURITIES
ACT").

          (b)  Optionee  acknowledges  and  understands  that the  Securities
constitute  "RESTRICTED  SECURITIES"  under the Securities Act and have not been
registered  under the  Securities  Act in  reliance  upon a  specific  exemption
therefrom,  which  exemption  depends upon,  among other  things,  the bona fide
nature of Optionee's  investment intent as expressed herein. In this connection,
Optionee   understands  that,  in  the  view  of  the  Securities  and  Exchange
Commission,  the  statutory  basis  for such  exemption  may be  unavailable  if
Optionee's representation was predicated solely upon a present intention to hold
these  Securities  for the minimum  capital  gains  period  specified  under tax
statutes,  for a deferred  sale,  for or until an  increase  or  decrease in the
market price of the  Securities,  or for a period of one year or any other fixed
period in the future.  Optionee further  understands that the Securities must be
held indefinitely  unless they are subsequently  registered under the Securities
Act or an  exemption  from such  registration  is  available.  Optionee  further
acknowledges and understands that the Company is under no obligation to register
the  Securities.  Optionee  understands  that  the  certificate  evidencing  the
Securities  will be imprinted with a legend which  prohibits the transfer of the
Securities  unless they are registered or such  registration  is not required in
the  opinion  of  counsel  satisfactory  to the  Company,  and any other  legend
required under applicable state securities laws.

          (c)  Optionee  is familiar with the provisions of Rule 701 and Rule
144, each  promulgated  under the Securities Act,  which,  in substance,  permit
limited  public  resale  of  "restricted   securities"  acquired,   directly  or
indirectly  from the issuer  thereof,  in a non-public  offering  subject to the
satisfaction  of  certain  conditions.  Rule  701  provides  that if the  issuer
qualifies under Rule 701 at the





time of the grant of the Option to the  Optionee,  the  exercise  will be exempt
from  registration  under the Securities  Act. In the event the Company  becomes
subject to the reporting  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  90 days  thereafter (or such longer period as
any market stand-off agreement may require) the Securities exempt under Rule 701
may be  resold,  subject  to  the  satisfaction  of  certain  of the  conditions
specified by Rule 144, including:  (1) the resale being made through a broker in
an unsolicited "broker's  transaction" or in transactions directly with a market
maker (as said term is defined  under the  Securities  Exchange Act of 1934,  as
amended);  and, in the case of an  affiliate,  (2) the  availability  of certain
public  information  about the Company,  (3) the amount of Securities being sold
during any three-month  period not exceeding the  limitations  specified in Rule
144(e), and (4) the timely filing of a Form 144, if applicable.

         In the event that the Company  does not  qualify  under Rule 701 at the
time of grant of the  Option,  then the  Securities  may be  resold  in  certain
limited  circumstances subject to the provisions of Rule 144, which requires the
resale  to  occur  not  less  than  one  year  after  the  later of the date the
Securities  were sold by the Company or the date the Securities  were sold by an
affiliate  of the Company,  within the meaning of Rule 144;  and, in the case of
acquisition  of  the  Securities  by an  affiliate,  or by a  non-affiliate  who
subsequently  holds the Securities less than two years,  the satisfaction of the
conditions  set  forth  in  sections  (1),  (2),  (3) and  (4) of the  paragraph
immediately above.

          (d)  Optionee  further  understands  that in the  event  all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act,  compliance  with  Regulation A, or some other  registration
exemption will be required;  and that,  notwithstanding  the fact that Rules 144
and 701 are not exclusive,  the Staff of the Securities and Exchange  Commission
has  expressed  its opinion  that persons  proposing  to sell private  placement
securities  other than in a registered  offering and otherwise  than pursuant to
Rule 144 or 701 will have a substantial  burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective  brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

                                          Signature of Optionee:


                                          ______________________________________


                                          Date: __________________________, ____



                                      -2-