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                                                                    EXHIBIT 10.7


                                 FIREPOND, INC.

                             STOCK OPTION AGREEMENT
                             ----------------------


         THIS OPTION AGREEMENT is made as of [DATE] (the "OPTION DATE"), between
Firepond, Inc., a Delaware corporation (the "COMPANY"), and [OPTIONEE], [AN
EMPLOYEE] [A DIRECTOR] of the Company or one or more of its Subsidiaries (the
"OPTIONEE").

         WHEREAS, the Company desires, by affording the Optionee an opportunity
to purchase shares of its common stock, $.01 par value per share (the "COMMON
STOCK"), as hereinafter provided, to carry out the purpose of the [NAME OF STOCK
OPTION PLAN] (the "PLAN") of the Company.

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto have
agreed, and do hereby agree, as follows:

         1.       GRANT OF OPTION. The Company hereby grants to the Optionee the
right and Option (hereinafter called the "OPTION") to purchase from the Company
all or any part of an aggregate amount of [NUMBER OF OPTION SHARES] shares (the
"OPTION SHARES") of Common Stock on the terms and conditions set forth in this
Option Agreement and in the Plan. This Option is not intended to constitute an
incentive stock option, as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "CODE").

         2.       PURCHASE PRICE. The purchase price of the Option Shares shall
be $[EXERCISE PRICE] per share.

         3.       TERM OF OPTION. The term of this Option shall be a period of
five (5) years from the Option Date, subject to earlier termination as
hereinafter provided.

         4.       EXERCISE OF OPTION. Subject to the provisions of Sections 7,
8, 9 and 11 hereof, this Option may be exercised during the term specified in
Section 3 hereof as to [INSERT: NUMBER OF SHARES INITIALLY VESTED] of the Option
Shares from and after the Option Date, and an additional [INSERT: NUMBER OF
SHARES VESTING MONTHLY] of the Option Shares from and after each monthly
anniversary following the Option Date, such that all of the Option Shares shall
be vested and exercisable on the three (3) year anniversary of the Option Date.
In no event shall this Option be exercisable for more than the aggregate number
of Option Shares.

         5.       NON- TRANSFERABILITY. This Option is personal to the Optionee
and is not transferable by the Optionee in any manner other than by will or by
the laws of descent and distribution; provided that this Option may also be
transferred by the Optionee, without consideration for the transfer, to members
of his or her immediate family, to trusts for the benefit of such family
members, to partnerships in which such family members are the only partners, or
to limited liability companies in which such family members are the only members
(each a


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<PAGE>

"PERMITTED TRANSFEREE"), provided that the transferee agrees in writing with the
Company to be bound by all of the terms and conditions of the Plan and this
Option Agreement. This Option may be exercised during the Optionee's lifetime
only by the Optionee (or by the Optionee's legal representative or guardian in
the event of the Optionee's incapacity) or by a Permitted Transferee pursuant to
this Section 5. The Optionee may elect to designate a beneficiary by providing
written notice of the name of such beneficiary to the Company, and may revoke or
change such designation at any time by filing written notice of revocation or
change with the Company; such beneficiary may exercise this Option in the event
of the Optionee's death to the extent provided herein. If the Optionee does not
designate a beneficiary, or if the designated beneficiary predeceases the
Optionee, the executor of the Optionee may exercise this Option to the extent
provided herein in the event of the Optionee's death.

         6.       NOT A CONTRACT OF EMPLOYMENT. Nothing in this Option Agreement
shall confer upon the Optionee any right to continue in the employ or service of
the Company or of any of its Subsidiaries or interfere in any way with the right
of the Company, the shareholders of the Company, the shareholders of the Company
or any such Subsidiary to terminate the employment or service of the Optionee at
any time.

         7.       TERMINATION OF EMPLOYMENT. Subject to Sections 8, 9 and 11
hereof, in the event that the Service Relationship of the Optionee shall
terminate or be terminated, the Option may be exercised (to the extent the
Optionee shall have been entitled to do so at the date of such termination
pursuant to Section 4 hereof) by the Optionee at any time:

                  (i)      within twelve (12) months after such termination if
         such termination was by reason of Disability;

                  (ii)     no later than the date of such termination if such
         termination was for Cause; and

                  (iii)    within thirty (30) days after such termination if
         such termination was for any reason other than Retirement, Disability,
         Cause or death.

However, in each case, in no event may the Option be exercised later than the
expiration of the term specified in Section 3 hereof. Any portion of this Option
that is not exercisable pursuant to Section 4 on the date of termination of the
Service Relationship shall immediately expire and be null and void.

         8.       DEATH. If the Optionee's Service Relationship terminates due
to the Optionee's death, the Option may be exercised (to the extent that the
Optionee shall have been entitled to do so at the date of his or her death
pursuant to Section 4 hereof) by the Optionee's designated beneficiary or the
person to whom the Option is transferred by will or the applicable laws of
descent and distribution, at any time within twelve (12) months after the
Optionee's death, but in no event later than the expiration of the term
specified in Section 3 hereof.



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         9.       EFFECT OF CERTAIN TRANSACTIONS. Upon the effectiveness of a
Transaction, unless provision is made in connection with the Transaction for the
assumption of this Option, or the substitution of this Option with new options
of the successor entity or parent thereof, with appropriate adjustment to the
number of Option Shares and, if appropriate, the Exercise Price, pursuant to the
terms of the Plan (the "ASSUMPTION"), all of the remaining Option Shares, to the
extent not vested and exercisable, shall, subject to and conditioned upon the
effectiveness of the Transaction, become vested and exercisable fifteen (15)
days prior to the anticipated effective date of the Transaction, as determined
by the Company. Further, unless there is an Assumption of this Option, this
Option shall terminate upon the effectiveness of the Transaction. In the event
of such termination, the Optionee shall be permitted to exercise this Option for
a period of at least fifteen (15) days prior to the anticipated effective date
of such Transaction to the extent that it is then vested and exercisable (after
giving effect to the acceleration of vesting, if any, provided for in this
Section 9), PROVIDED, HOWEVER, that the exercise of the portion of this Option
that becomes vested and exercisable pursuant to the acceleration provision of
this Section 9 shall be subject to and conditioned upon the effectiveness of the
Transaction. In addition, if there is an Assumption and the Optionee's Service
Relationship with such successor entity is, on or within six (6) months after
such Transaction, (i) terminated by the successor entity without Cause, or (ii)
terminated by the Optionee for Good Reason, then one hundred percent (100%) of
the shares of Common Stock subject to this Option, to the extent not fully
vested and exercisable, shall become fully vested and exercisable. In the event
that the vesting of this Option is accelerated following an Assumption pursuant
to this Section 9, Optionee shall be given a period of three (3) months
following such termination to exercise this Option.

         10.      METHOD OF EXERCISING OPTION.

                  (a)      Subject to the terms and conditions of this Option
Agreement, this Option may be exercised by written notice (in substantially the
form of APPENDIX A attached hereto) to the Chief Financial Officer of the
Company at the principal office of the Company. Such notice shall state the
election to exercise the Option and the number of Option Shares in respect of
which it is being exercised, and shall be signed by the person so exercising the
Option. Such notice shall be accompanied by payment of the full purchase price
of such Option Shares, which payment shall be made in cash or by certified check
or bank draft payable to the Company, or, in the sole discretion of the Company
(i) by delivery (or attestation to the ownership) of shares of Common Stock with
a Fair Market Value equal to the total aggregate purchase price (valued as of
the exercise date) which shares were either purchased by the Optionee on the
open market or have been held by the Optionee free of any applicable
restrictions for at least six (6) months, or (ii) by delivery to the Company of
a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company in the amount equal to the total aggregate purchase price;
provided that, in the event that the Optionee chooses to pay the purchase price
as so provided, the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Board
shall prescribe as a condition of such payment procedure.



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<PAGE>

                  (b)      Payment instruments will be received subject to
collection. The certificate or certificates for the shares as to which the
Option shall have been so exercised shall be registered in the name of the
person so exercising the Option, or if the Optionee so elects, in the name of
the Optionee or one other person as joint tenants. In the event the Option shall
be exercised by any person other than the Optionee, such notice shall be
accompanied by appropriate proof of the right of such person to exercise the
Option. Certificates for the Option Shares so purchased will be issued and
delivered to the Optionee upon compliance to the satisfaction of the Board with
all requirements under applicable laws or regulations in connection with such
issuance. Until the Optionee shall have complied with the requirements hereof
and of the Plan, including the withholding requirements set forth in Section 13
below, the Company shall be under no obligation to issue the Option Shares
subject to this Option, and the determination of the Board as to such compliance
shall be final and binding on the Optionee. The Company shall not be required to
issue fractional shares upon the exercise of this Option.

         11.      FORFEITURE OF UNEXERCISED OPTIONS. In the event the Optionee
breaches the terms of the Company's standard Employee Agreement (the "EMPLOYEE
AGREEMENT") as executed by the Optionee and the Company, the terms of which are
expressly incorporated herein by reference, any Options which have vested but
are unexercised at the time of such breach shall immediately be forfeited and
shall not thereafter be exercisable by Optionee. Forfeiture of the unexercised
portion of the Option shall apply to the unexercised portion held by the
Optionee or by any Permitted Transferee of such unexercised portion of the
Option.

         12.      PAYMENT UPON THE SALE OF EXERCISED SHARES. In the event that
the Optionee breaches any of the terms of the Employee Agreement and prior to
such breach has, or a Permitted Transferee has, sold, transferred or otherwise
disposed of or, following such breach, sells, transfers or otherwise disposes
of, any Exercised Shares, for each Exercised Share so sold, transferred or
disposed of, the Optionee hereby agrees to pay to the Company, in cash, upon
demand, an amount equal to the difference between the Exercise Price per share
of the Exercised Shares and the value per share received by the Optionee, or the
Permitted Transferee, pursuant to such sale of the Exercised Shares.

         13.      WITHHOLDING REQUIREMENTS.

                  (a)      PAYMENT BY OPTIONEE. Upon exercise of the Option by
the Optionee (or, if applicable, the transfer, in whole or in part of any shares
acquired upon the exercise of the Option, the operation of any law or regulation
providing for the imputation of interest related to the Option, or the lapsing
of any restriction with respect to any shares acquired upon exercise of the
Option) which exercise (or other event) gives rise to taxable income and
subjects the Company to a tax withholding obligation, the Company shall have the
right to require the Optionee to remit to the Company cash in an amount
sufficient to satisfy applicable federal, state, foreign and local tax
withholding requirements or the Company may, but will not be required to,
withhold such amounts from payroll or any other amounts payable to the Optionee.
The Company shall inform the Optionee as to whether it will require the Optionee
to remit cash for withholding taxes in accordance with the preceding sentence
within two (2) business days after



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<PAGE>

receiving from the Optionee notice that such Optionee intends to exercise, or
has exercised, all or a portion of the Option.

                  (b)      PAYMENT IN COMMON STOCK. Subject to approval by the
Company, the Optionee may elect to have the minimum tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Common Stock to be issued a number of shares of Common Stock with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due or (ii) transferring to the Company
shares of Common Stock owned by the Optionee with an aggregate Fair Market Value
(as of the date the withholding is effected) that would satisfy the withholding
amount due. The Fair Market Value of any shares of Common Stock withheld or
tendered to satisfy any such tax withholding obligation shall not exceed the
amount determined by the applicable minimum statutory withholding rates.

         14.      STOCK PLAN. This Option is subject to all of the terms and
conditions set forth in the Plan; provided, that, notwithstanding anything in
this Option Agreement to the contrary, to the extent of any conflict between the
terms of the Plan and this Option Agreement, the terms of the Plan shall
control. By acceptance hereof, Optionee acknowledges receipt of a copy of the
Plan and agrees to and accepts this Option subject to the terms of the Plan. A
copy of the Plan is on file with the Chief Financial Officer of the Company.

         15.      NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The grant
of this Option and the issuance of shares of Common Stock upon exercise of this
Option shall be subject to compliance with all applicable requirements of
federal, state and foreign law with respect to such securities. This Option may
not be exercised if the issuance of shares of Common Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Common Stock may then be listed. Further, no shares
of Common Stock shall be issued pursuant to this Option until all applicable
securities law and other legal and stock exchange or similar requirements have
been satisfied. The Board may require the placing of such stop orders and
restrictive legends on certificates for Common Stock received pursuant to this
Option, as it deems appropriate. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares hereunder shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite authority shall
not have been obtained. As a condition to the exercise of this Option, the
Company may require the Optionee to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as
may be requested by the Company and may require the Optionee to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

         16.      LOCK-UP PROVISION. The Optionee agrees, if requested by the
Company and any underwriter engaged by the Company, not to offer, sell, contract
to sell, pledge, hypothecate, grant any option to purchase or make any short
sale of, or otherwise dispose of any securities



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(including the right to acquire any Common Stock) of the Company (including,
without limitation, pursuant to Rule 144 under the Securities Act of 1933, as
amended (the "SECURITIES ACT")) held by him or her for such period following the
effective date of any registration statement of the Company filed under the
Securities Act as the Company or such underwriter shall specify reasonably and
in good faith, not to exceed ninety (90) days.

         17.      STATUS. Neither the Optionee nor the Optionee's executor,
administrator, heirs or legatees shall be or have any rights or privileges of a
shareholder of the Company in respect of the shares transferable upon exercise
of the Option granted hereunder, unless and until certificates representing such
shares shall be endorsed, transferred, and delivered and the transferee has
caused the Optionee's name to be entered as the shareholder of record on the
books of the Company.

         18.      COMPANY AUTHORITY. The existence of the Option herein granted
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock of the Company or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

         19.      DISPUTES. As a condition of the granting of the Option herein
granted, the Optionee agrees, for the Optionee, any Permitted Transferees and
the Optionee's personal representatives, that any interpretation which may arise
under or as a result of or pursuant to this Option Agreement shall be determined
by the Board, in its sole discretion, and that any interpretation by the Board
of the terms of this Option Agreement shall be final, binding and conclusive.

         20.      EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of this Option
Agreement and that equitable relief, including specific performance and
injunctive relief, may be used to enforce the provisions of this Option
Agreement.

         21.      BINDING EFFECT. This Option Agreement shall be binding upon
the heirs, executors, administrators, successors and assigns of the parties
hereto.

         22.      INTEGRATED AGREEMENT. This Option Agreement and the Plan
constitute the entire understanding and agreement between the Optionee and the
Company with respect to the subject matter contained herein and supercedes any
prior agreements, understandings, restrictions, representations, or warranties
among the Optionee and the Company with respect to such subject matter except as
provided for herein. To the extent contemplated herein, the provisions of this
Option Agreement shall survive any exercise of this Option and shall remain in
full force and effect.



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         23.      SAVING CLAUSE. If any provision(s) of this Option Agreement
shall be determined to be illegal or unenforceable, such determination shall in
no manner affect the legality or enforceability of any other provision hereof.

         24.      HEADINGS. The headings used herein are intended only for
convenience in finding the subject matter hereof and do not constitute part of
the text of this Option Agreement and shall not be considered in the
interpretation of this Option Agreement.

         25.      NOTICES. All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by telex or facsimile transmission or two (2) days after deposit in
the mail if mailed by first class registered or certified mail, postage prepaid
or one (1) business day after deposit with a nationally recognized overnight
carrier. Notices to the Company or the Optionee shall be addressed to such
address or addresses as may have been furnished by such party in writing to the
other.

         26.      GOVERNING LAW. This Option Agreement is a Massachusetts
contract and shall be construed under and be governed in all respects by the
laws of the Commonwealth of Massachusetts, without regard to conflict of law
principles. Any legal action or suit related to this Agreement shall be brought
exclusively in the courts of Massachusetts. Both parties agree that the courts
of Massachusetts are a convenient forum for the resolution of disputes.

         27.      DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have their respective meanings set forth in the Plan. For purposes
of this Option Agreement, the following terms shall be defined as set forth
below:

                  "CAUSE" means (i) any material breach by the Optionee of any
agreement to which the Optionee and the Company or its Subsidiaries are parties,
including breach of covenants not to compete and covenants relating to the
protection of confidential information and proprietary rights of the Company or
its Subsidiaries which breach is not cured pursuant to the terms of such
agreement, (ii) any act (other than retirement) or omission to act by the
Optionee which would reasonably be likely to have a material adverse effect on
the business of the Company or its Subsidiaries or on the Optionee's ability to
perform services for the Company or its Subsidiaries, including, without
limitation, the conviction or plea of guilty or nolo contendre to any crime
(other than ordinary traffic violations) which impairs the Optionee's ability to
perform his or her duties, (iii) any material misconduct or willful and
deliberate non-performance of duties by the Optionee in connection with the
business or affairs of the Company or its Subsidiaries, (iv) the Optionee's
theft, dishonesty, or falsification of the Company's or its Subsidiaries'
documents or records, or (v) the Optionee's improper use or disclosure of the
Company's or its Subsidiaries' confidential or proprietary information. All
references herein to the Company or its Subsidiaries shall include any successor
entity thereof.

                  "DISABILITY" means permanent and total disability as
determined by the Board.

                  "EARLY RETIREMENT" means retirement, with consent of the Board
at the time of retirement, from active employment with the Company and any
Subsidiary or Parent Corporation.



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                  "EXERCISED SHARES" means all shares of Common Stock purchased
by Optionee upon exercise of this Option, or any portion thereof.

                  "GOOD REASON" means the occurrence of any of the following
events: (i) a substantial adverse change in the nature or scope of the
Optionee's responsibilities, authorities, powers, functions or duties; (ii) a
reduction in the Optionee's annual base salary except for across-the-board
salary reductions similarly affecting all, or substantially all, management
employees; or (iii) the relocation of the offices at which the Optionee is
principally employed to a location more than fifty (50) miles from such offices.

                  "NORMAL RETIREMENT" means retirement from active employment
with the Company and any Subsidiary or Parent Corporation on or after age 65.

                  "RETIREMENT" means Normal Retirement or Early Retirement.

                  "SERVICE RELATIONSHIP" means the Optionee's employment or
service with the Company or its Subsidiary, whether in the capacity of an
employee, director or a consultant; provided that, if this Option was granted
under the 1999 Director Plan, then "Service Relationship" shall mean any
relationship as a non-employee director of the Company or any Subsidiary of the
Company. Unless otherwise determined by the Company, the Optionee's Service
Relationship shall not be deemed to have terminated merely because of a transfer
between locations of the Company or its Subsidiaries or a transfer between the
Company and any Subsidiary, provided that there is no interruption or other
termination of the Service Relationship. Subject to the foregoing, the Company,
in its discretion, shall determine whether the Optionee's Service Relationship
has terminated and the effective date of such termination. The Company shall
have the sole discretion to determine the reason for the termination of the
Optionee's Service Relationship.



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         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
duly executed by an officer thereunto duly authorized, and the Optionee has
hereunto set his or her hand, as of the date(s) set forth below.


                                        FIREPOND, INC.


                                        By:
                                            -----------------------------------
                                            Name: Paul K. McDermott
                                            Title: Chief Financial Officer



                                        ---------------------------------------
                                        Date



                                        OPTIONEE


                                        ---------------------------------------
                                        Optionee Signature



                                        ---------------------------------------
                                        Date




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                                   APPENDIX A
                                   ----------

                          STOCK OPTION EXERCISE NOTICE



Firepond, Inc.
890 Winter Street
Waltham, Massachusetts  02451
Attention:  Chief Financial Officer                    Date: ___________________


         Pursuant to the terms of the Stock Option Agreement granted pursuant to
the [INSERT: PLAN] on _______________and entered into by Firepond, Inc. and
[INSERT: OPTIONEE], I hereby [Circle One] partially/fully exercise such option
by including herein payment in the amount of $__________ representing the
purchase price for __________ shares of common stock, all of which have vested
in accordance with the Stock Option Agreement. I hereby authorize payroll
withholding or otherwise will make adequate provision for federal, state,
foreign and local tax withholding obligations of the Company, if any, that arise
in connection with the option.

         I acknowledge that the shares are being acquired in accordance with and
subject to the terms, provisions and conditions of the Plan and the Stock Option
Agreement, copies of which I have received and carefully read and understand,
including the provision regarding payment upon the sale of exercised shares set
forth therein, to all of which I hereby expressly assent.



                           Sincerely yours,


                                     ___________________________________________
                                     Name: [INSERT OPTIONEE'S NAME]

                                     Address:
                                               _________________________________

                                               _________________________________





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