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                           INTERPACKET NETWORKS, INC.

                       NONQUALIFIED STOCK OPTION AGREEMENT


                  THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is
entered into as of _________________, by and between Interpacket Networks, Inc.,
a Delaware corporation (the "Company"), and ________ ("Optionee") pursuant to
the Company's 1999 Director Stock Option Plan (the "Plan"). All capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Plan.


                                R E C I T A L S:


                  A. Optionee is a non-employee member of the Board of Directors
of the Company (the "Board").

                  B. The Company desires to grant Optionee the right to purchase
shares of the Company's Common Stock, par value $.001 per share (the "Common
Stock"), pursuant to the terms and conditions of this Agreement and the Plan.


                               A G R E E M E N T:


                  NOW, THEREFORE, in consideration of the covenants hereinafter
set forth, the parties agree as follows:

                  1. OPTION; NUMBER OF SHARES. The Company hereby grants to
Optionee the right (the "Option") to purchase up to a maximum of ______ shares
(the "Shares") of Common Stock at a price of $_____ per share (the "Option
Price") to be paid in accordance with Section 6 hereof. This Option and the
right to purchase all or any portion of the Shares are subject to the terms and
conditions stated in this Agreement and in the Plan.

                  2. VESTING CRITERIA. The Option shall vest and become
exercisable as set forth in Schedule A attached to this Agreement, provided that
Optionee has remained in continuous service as a director of the Company for the
preceding twelve (12)-month period prior to each such anniversary and is a
Non-Employee Director on the applicable anniversary date.


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                  3. TERM OF AGREEMENT. This Option, and Optionee's right to
exercise this Option, shall terminate when the first of the following occurs:
(a) termination pursuant to Sections 4(d)(ii), 4(d)(iii) or 4(d)(iv) of the
Plan; or (b) the expiration of ten (10) years from the date hereof.

                  4. TERMINATION OF SERVICE OR OTHER RELATIONSHIP. The
termination for any reason of Optionee's service or other relationship with the
Company shall not accelerate the vesting of the Option or affect the number of
Shares with respect to which the Option may be exercised, and this Option may
only be exercised with respect to that number of Shares which could have been
purchased under the Option had the Option been exercised by Optionee on the date
of such termination.

                  5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of Optionee
under this Agreement may not be assigned or transferred except by will, by the
laws of descent and distribution, or in accordance with Section 4(f) of the Plan
and may be exercised during the lifetime of Optionee only by such Optionee. Any
attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose of
the Option in contravention of this Agreement or the Plan shall be void and
shall have no effect. If Optionee should die while Optionee is a member of the
Board, and provided Optionee's rights hereunder shall have vested, in whole or
in part, pursuant to Section 2 hereof, Optionee's designee, legal
representative, or legatee, the successor trustee of Optionee's inter vivos
trust or the person who acquired the right to exercise the Option by reason of
the death of Optionee (individually, a "Successor") shall, subject to Section
4(d)(ii) of the Plan, succeed to Optionee's rights under this Agreement. After
the death of Optionee, only a Successor may exercise the Option.

                  6. EXERCISE OF OPTION. On or after the vesting of the Option
in accordance with Section 2 hereof and until termination of the Option in
accordance with Section 3 hereof, the Option may be exercised by Optionee (or
such other person specified in Section 5 hereof) to the extent exercisable as
determined under Section 2 hereof, upon delivery of the following to the Company
at its principal executive offices:

                        (a) a written notice of exercise which identifies this
Agreement and states the number of Shares then being purchased, provided that in
no event shall an Option be exercisable for a fractional share;

                        (b) a (i) check, (ii) cash, (iii) other shares which
have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the shares as to which the Option shall be exercised and
which have been owned by the Non-Employee Director for at least six (6) months
at the time of exercise, (iv) in the event the Common Stock is publicly traded,
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of
proceeds required to pay the

                                       2.
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exercise price, or (v) any combination of the
foregoing methods of payment in the amount of the aggregate Option Price;

                            (c) a check or cash in the amount reasonably
requested by the Company to satisfy the Company's withholding obligations under
federal, state or other applicable tax laws with respect to the taxable income,
if any, recognized by Optionee in connection with the exercise, in whole or in
part, of the Option (unless the Company and Optionee shall have made other
arrangements for deductions or withholding from Optionee's wages, bonus or other
income paid to Optionee by the Company, provided such arrangements satisfy the
requirements of applicable tax laws); and

                            (d) a written representation and undertaking, if
requested by the Company pursuant to Section 7(b) hereof, in such form and
substance as the Company may require, setting forth the investment intent of
Optionee, or a Successor, as the case may be, and such other agreements,
representations and undertakings as described in the Plan.

                  7.       REPRESENTATIONS AND WARRANTIES OF OPTIONEE.

                            (a) Optionee represents and warrants that the Option
is being acquired by Optionee for Optionee's personal account, for investment
purposes only, and not with a view to the distribution, resale or other
disposition thereof.

                            (b) Optionee acknowledges that the Company may issue
Shares upon the exercise of the Option without registering such securities under
the Act on the basis of certain exemptions from such registration requirement.
Accordingly, Optionee agrees that Optionee's exercise of the Option may be
expressly conditioned upon Optionee's delivery to the Company of such
representations and undertakings as the Company may reasonably require in order
to secure the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present intention
of selling or otherwise disposing of such Shares.

                            (c) Optionee acknowledges receipt of this Agreement
granting the Option, and the Plan, and understands that all rights and
liabilities connected with the Option are set forth herein and in the Plan.

                  8. NO RIGHTS AS A SHAREHOLDER. Optionee shall have no rights
as a shareholder of any shares of Common Stock issuable upon exercise of the
Option until a certificate evidencing such shares shall have been issued to the
Optionee, and no adjustment shall be made for dividends or distributions or
other rights in respect of any share for which the record date is prior to the
date upon which the Optionee shall become the holder of record thereof, except
as may be provided under Section 6(b) of the Plan.


                                       3.
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                  9. LIMITATION OF COMPANY'S LIABILITY FOR NONISSUANCE. The
inability of the Company to obtain, from any regulatory body having
jurisdiction, stock exchange or quotation system, authority reasonably deemed
by the Company's counsel to be necessary for the lawful issuance and sale of
any shares of Common Stock hereunder and under the Plan shall relieve the
Company of any liability in respect of the nonissuance or sale of such shares
as to which such requisite authority shall not have been obtained.

                  10. CONFIDENTIALITY. Optionee agrees to hold in the strictest
of confidence all material information, including without limitation all
financial information, provided to Optionee by the Company, and further agrees
not to use such information for any purpose adverse to the Company, not to
duplicate such information or to deliver such information to any other person.

                  11. THIS AGREEMENT SUBJECT TO PLAN. This Agreement is made
under the provisions of the Plan and shall be interpreted in a manner consistent
with it. To the extent that any provision in this Agreement is inconsistent with
the Plan, the provisions of the Plan shall control. A copy of the Plan is being
provided to Optionee together with this Agreement. A copy of the Plan is also
available to Optionee at the Company's principal executive offices upon request
and without charge. The interpretation of the Board of any provision of the
Plan, the Option or this Agreement, and any determination with respect thereto
or hereto by the Board, shall be final, conclusive and binding on all parties.

                  12. RESTRICTIVE LEGENDS. Optionee hereby acknowledges that
federal securities laws and the securities laws of the state in which Optionee
resides may require the placement of certain restrictive legends upon the Shares
issued upon exercise of the Option, and Optionee hereby consents to the placing
of any such legends upon certificates evidencing the Shares as the Company, or
its counsel, may reasonably deem necessary; provided, however, that any such
legend or legends shall be removed when no longer applicable.

                  13. NOTICES. All notices, requests and other communications
hereunder shall be in writing and, if given by telecopy, shall be deemed to have
been validly delivered 12 hours after confirmation of transmission to the fax
numbers set forth below, if sent during usual business hours; if given by
personal delivery, shall be deemed to have been validly served, given or
delivered upon actual delivery; and, if mailed, shall be deemed to have been
validly served, given or delivered three business days after deposit in the
United States mails, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the following
addresses (or such other address(es) as a party may designate for itself by like
notice):


                           If to the Company:


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                                Interpacket Networks, Inc.
                                1901 Main Street, 2nd Floor
                                Santa Monica, CA 90405
                                Fax No.: (310) 382-3310

                           If to Optionee:

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

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

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

                                Fax No.:
                                            --------------------

                  14. NO RIGHT TO REELECTION. Nothing contained in this
Agreement shall confer, intend to confer or imply any obligation on the part of
the Board to nominate any of its members for reelection by the Company's
shareholders, nor confer upon any Optionee the right to remain a member of the
Board for any period of time, or at any particular rate of compensation.

                  15. GOVERNING LAW. This Agreement shall be construed under and
governed by the laws of the State of Delaware without regard to the conflict of
law provisions thereof.

                  16. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and both of which
together shall be deemed one agreement.




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                                       5.


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                  IN WITNESS WHEREOF, the Company and Optionee have executed
this Agreement as of the date first above written.

                                          THE COMPANY:

                                          INTERPACKET NETWORKS, INC.,
                                          a Delaware corporation



                                          By:
                                                ------------------------------
                                                Name:
                                                Title:


                                          OPTIONEE:



                                          --------------------------------
                                           Name:





                                       6.