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                                OPTION AGREEMENT

        Option Agreement, dated as of August 11, 1994, between Airship
 International, Ltd., a corporation organized under the laws of the State of New
 York (the "Company") and Louis J. Pearlman (the "Optionee").

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

         NOW, THEREFORE, the parties, intending to be legally bound agree as
follows:

         1. Grant of Option. In consideration of the agreement of the Optionee
 to cancel certain warrants owing from the Company to the Optionee and the
 guaranty of certain obligations of the Company by the Optionee the Company
 hereby grants the Optionee an option to purchase 5,000,000 shares of the common
 stock, par value $.01 per share (the "Common Stock") of the Company (the
 "Option Shares").

        2. Exercise Price. The exercise price for the purchase of Option Shares
 under this Option is $.125 per share.

         3. Exercise of Option. The Option may be exercised by Optionee any time
 prior to its termination in whole or in parts, which cumulatively shall not
 exceed the whole, by giving the Company written notice of the number of Option
 Shares to be purchased on each exercise of the Option.

        4. Termination. The Option will terminate at 5:00 P.M., New York time,
 on August 10, 1999.

        5. Adjustments. In case the Company shall (i) pay a dividend in Common
 Stock or make a distribution in Common Stock, (ii) subdivide the shares of the
 Common Stock, (iii) combine the outstanding shares of the Common Stock into a








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 smaller number of shares, (iv) issue any securities by reclassification of
 shares of the Common Stock, or (v) distribute to all holders of the Common
 Stock, other securities, evidences of indebtedness or assets (excluding cash
 dividends or distributions out of retained earnings), then the number of Option
 Shares purchasable by Optionee upon exercise of the Option immediately prior to
 such event shall be adjusted so that Optionee shall be entitled to receive the
 kind and number of Option Shares, other securities, evidences of indebtedness
 or assets which he would have owned and have been entitled to receive after the
 happening of any such event had the Option been exercised immediately prior to
 the happening of such event or any record date with respect thereto, whichever
 is earlier. Any such adjustment shall be made without changing the aggregate
 exercise price applicable to the then unexercised portion of the Option Shares.

        6. Entire Agreement. This Agreement contains the entire agreement and
 understanding of the parties with respect to its subject matter. This Agreement
 supersedes all prior agreements and understandings between the parties, both
 written and oral, and all contemporaneous oral agreements and understandings,
 with respect to its subject matter.

        7. Governing Law. This Agreement and the Option shall be governed by,
 and construed in accordance with, the laws of the State of New York, without
 regard to conflict of laws principles applied in the State of New York.


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

                                             AIRSHIP INTERNATIONAL LTD.



                                             By: /s/ Alan Siegel
                                                _____________________
                                                    Alan Siegel



                                                 /s/ LOUIS J. PEARLMAN
                                                _____________________
                                                  Louis J. Pearlman



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                       AMENDMENT NO. 1 TO OPTION AGREEMENT

        WHEREAS, Airship International Ltd. (the "Company") and Louis J.
 Pearlman ("Optionee") have entered into an Option Agreement dated as of
 December 11, 1994 (the "Agreement"); and

        WHEREAS, the parties now desire to amend the Agreement;

        NOW WHEREFORE, in consideration of the Optionee's guaranty of certain
 obligations of the Company existing pursuant to an Aerial Advertising Agreement
 between the Company and Mastellone Hnos, S.A., the parties hereby amend the
 Agreement as follows:

         Capitalized terms used and not otherwise defined herein shall have the
 meanings set forth in the Agreement.

        Paragraph 2 of the Agreement is hereby amended by deleting therefrom the
 exercise price of $.125 per Option Share referred to therein and replacing it
 with an exercise price of $.02 per Option Share.

        IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
 the 15th day of December, 1994.

                                             AIRSHIP INTERNATIONAL LTD.

                                             By: /s Alan Siegel
                                                _____________________
                                                    Alan Siegel




                                                 /s/ LOUIS J. PEARLMAN
                                                ______________________
                                                  Louis J. Pearlman



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