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                                                                   EXHIBIT 10.23



                                                                November 5, 1999

                       NONQUALIFIED STOCK OPTION AGREEMENT


A STOCK OPTION for a total of 130,000 shares of common stock (hereinafter the
"Option"), of N2H2, Inc., a Washington corporation (the "Company"), is hereby
granted to Farzeen Mohazzabfar (the "Optionee"), at the price and subject to the
terms and provisions set forth below. For purposes of this Agreement the term
"shares" shall be deemed to apply to shares of common stock of the Company as of
the date hereof.

1.      OPTION PRICE. The option price is 100% of the fair market value as
        determined by the Board of Directors and measured by the average of the
        high and low trading price of the Company's Common Stock on November
        5th, 1999.

2.      VESTING AND EXERCISE OF OPTION. The Option shall vest and be exercisable
        in accordance with the following provisions:

        a.      Schedule of Vesting and Rights to Exercise. The Option shall be
                vested and exercisable as follows:

<TABLE>
<CAPTION>
                    Years                Percent of         Number of
               Following Grant          Option Vested   Shares Exercisable
               <S>                      <C>             <C>
               After One Year                  25%           32,500
               After Two Years                 50%           65,000
               After Three Years               75%           97,500
               After Four Years               100%          130,000
</TABLE>

        b.      Method of Exercise. The Option shall be exercisable by a written
                notice which shall;

                i.   state the election to exercise the Option, the number of
                     shares in respect of which it is being exercised;

                ii.  contain such representations and agreements as to the
                     holder's investment intent with respect to such shares of
                     common stock, acquired by exercise of the Option, as may be
                     satisfactory to the Company;

                iii. be signed by the person entitled to the Option; and

                iv.  be in writing and delivered in person or by certified mail
                     to the President or Secretary of the Company.



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Payment of the purchase price of any shares with respect to which an Option is
being exercised shall be by check. The certificate or certificates for shares of
common stock as to which the Option shall be exercised shall be registered in
the name of the person exercising the Option. Options hereunder may not at any
time be exercised for a fractional number of shares.

        c.      Restrictions on Exercise. No Option may be exercised if the
                issuance of the shares upon exercise would constitute a
                violation of any applicable federal or state securities or other
                law or valid regulation. As a condition to the exercise of this
                Option the Company may require the person exercising the Option
                to make any representation and warranty to the Company as the
                Company's counsel believes may be required by any applicable law
                or regulations.

                The following legend will appear on all certificates for option
                shares:

                THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE
                ACQUIRED BY THE REGISTERED HOLDER PURSUANT TO REPRESENTATION
                THAT THE HOLDER IS ACQUIRING THESE SHARES FOR THE HOLDER'S OWN
                ACCOUNT, FOR INVESTMENT. THESE SHARES MAY NOT BE PLEDGED,
                HYPOTHECATED, SOLD, TRANSFERRED OR OFFERED FOR SALE IN THE
                ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SHARES
                UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION
                FROM SUCH REGISTRATION STATEMENT.

3.      Non-Transferability of Option. Except as otherwise provided herein, no
        Option may be sold, pledged, assigned or transferred in any manner,
        other than by will or the laws of descent and distribution, and may be
        exercised during the lifetime of the Optionee only by the Optionee or by
        the guardian or legal representative of the Optionee. The terms of the
        Option shall be binding upon the executors, administrators, heirs,
        successors, and assigns of the Optionee.

4.      Termination of Service to Company. An Option may only be exercised, to
        the extent vested on the employee's last day of service to the Company
        as an employee, for a period of one hundred (100) days after such last
        day of service, but in no event later than (10) years after its grant.

5.      Term of Option. No Option may be exercised more than ten (10) years from
        the date of original grant, and may be exercised during such term only
        in accordance with the terms of this agreement.



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6.      Adjustments Upon Changes in Capitalization. The number and kind of
        shares of common stock subject to this Option shall be appropriately
        adjusted along with a corresponding adjustment in the Option price to
        reflect any stock dividend, stock split, split-up or any combination,
        exchange or change of shares, however accomplished.

7.      Accelerated Vesting. Notwithstanding any provision to the contrary, in
        the event the Company or the shareholders of the Company enter into an
        agreement to dispose of all or substantially all of the assets or Shares
        by means of a sale, reorganization, liquidation, or otherwise, this
        Option shall become immediately exercisable with respect to the full
        number of Shares subject to this Option. If this Option is not exercised
        prior to consummation of any such agreement, it shall terminate. In
        addition, this Option shall vest and become exercisable upon certain
        terminations of employment set forth in that certain Executive
        Employment Agreement dated November 5th between the Optionee and the
        Company.

DATED : November 5, 1999                    N2H2, Inc.

                                            By /s/ Peter Nickerson
                                            ------------------------------------
                                            Peter Nickerson, President


Optionee acknowledges and represents that he is familiar with the terms and
provisions of this Nonqualified Stock Option Agreement as set forth above and
hereby accepts this Option subject to all the terms and provisions hereof.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
of the Compensation Committee of the Company's Board of Directors with respect
to the interpretation of any provision under this Nonqualified Stock Option
Agreement.


DATED: November 5, 1999

                                            /s/ Farzeen Mohazzabfar
                                            ------------------------------------
                                            Farzeen Mohazzabfar, Optionee