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                         BIOSANTE PHARMACEUTICALS, INC.
                              AMENDED AND RESTATED
                             1998 STOCK OPTION PLAN

                       (As amended through June 13, 2001)

1.       PURPOSE OF PLAN.

         The purpose of the BioSante Pharmaceuticals, Inc. 1998 Stock Option
Plan (the "Plan") is to advance the interests of BioSante Pharmaceuticals, Inc.
(the "Company") and its shareholders by enabling the Company and its
Subsidiaries to attract and retain persons of ability to perform services for
the Company and its Subsidiaries by providing an incentive to such individuals
through equity participation in the Company and by rewarding such individuals
who contribute to the achievement by the Company of its objectives, as the Board
of Directors describes them.

2.       DEFINITIONS.

         The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

         2.1 "CVE" means the Canadian Venture Exchange.

         2.2 "CVE REQUIREMENTS" means the by-laws, rules, circulars and
policies of the CVE.

         2.3 "BOARD" means the Board of Directors of the Company.

         2.4 "BROKER EXERCISE NOTICE" means a written notice pursuant to
which a Participant, upon exercise of an Option, irrevocably instructs a broker
or dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.

         2.5 "CHANGE IN CONTROL" means an event described in Section 9.1 of
 the Plan.

         2.6 "CODE" means the Internal Revenue Code of 1986, as amended.

         2.7 "COMMITTEE"  means the group of individuals  administering the
 Plan, as provided in Section 3 of the Plan.

         2.8 "COMMON STOCK" means the common stock of the Company, no par value,
or the number and kind of shares of stock or other securities into which such
Common Stock may be changed in accordance with Section 4.3 of the Plan.

         2.9 "DISABILITY" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to

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the Participant, the permanent and total disability of the Participant within
the meaning of Section 22(e)(3) of the Code.

         2.10 "ELIGIBLE RECIPIENTS" means all employees of the Company or any
Subsidiary and any non-employee directors, officers, consultants and independent
contractors of the Company or any Subsidiary.

         2.11 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         2.12 "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
any date (or, if no shares were traded or quoted on such date, as of the next
preceding date on which there was such a trade or quote) (a) the mean between
the reported high and low sale prices of the Common Stock if the Common Stock is
listed, admitted to unlisted trading privileges or reported on any foreign or
national securities exchange or on the Nasdaq National Market or an equivalent
foreign market on which sale prices are reported; (b) if the Common Stock is not
so listed, admitted to unlisted trading privileges or reported, the closing bid
price as reported by the Nasdaq SmallCap Market, OTC Bulletin Board or the
National Quotation Bureau, Inc. or other comparable service; or (c) if the
Common Stock is not so listed or reported, such price as the Committee
determines in good faith in the exercise of its reasonable discretion.

         2.13 "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.

         2.14 "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.

         2.15 "OPTION" means an Incentive Stock Option or a Non-Statutory Stock
 Option.

         2.16 "PARTICIPANT" means an Eligible Recipient who receives one or more
 Options under the Plan.

         2.17 "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock or any
other shares of capital stock of the Company that are already owned by the
Participant or, with respect to any Option, that are to be issued upon the
exercise of such Option.

         2.18 "RETIREMENT" means termination of employment or service pursuant
to and in accordance with the regular (or, if approved by the Board for purposes
of the Plan, early) retirement/pension plan or practice of the Company or
Subsidiary then covering the Participant, provided that if the Participant is
not covered by any such plan or practice, the Participant will be deemed to be
covered by the Company's plan or practice for purposes of this determination.

         2.19 "SECURITIES ACT" means the Securities Act of 1933, as amended.

         2.20 "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.


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         2.21 "TAX DATE" means the date any withholding tax obligation arises
under the Code or other applicable tax statute for a Participant with respect to
an Option.

3.       PLAN ADMINISTRATION.

         3.1 THE COMMITTEE. The Plan will be administered by the Board or by a
committee of the Board. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act and, if the Board so determines in its sole discretion, who are
"outside directors" within the meaning of Section 162(m) of the Code. Such a
committee, if established, will act by majority approval of the members (but may
also take action with the written consent of all of the members of such
committee), and a majority of the members of such a committee will constitute a
quorum. As used in the Plan, "Committee" will refer to the Board or to such a
committee, if established. To the extent consistent with corporate law, the
Committee may delegate to any officers of the Company the duties, power and
authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act. The Committee may
exercise its duties, power and authority under the Plan in its sole and absolute
discretion without the consent of any Participant or other party, unless the
Plan specifically provides otherwise. Each determination, interpretation or
other action made or taken by the Committee pursuant to the provisions of the
Plan will be final, conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the shareholders of the Company, the
participants and their respective successors-in-interest. No member of the
Committee will be liable for any action or determination made in good faith with
respect to the Plan or any Option granted under the Plan.

         3.2      AUTHORITY OF THE COMMITTEE.

                  (a) In accordance with and subject to the provisions of the
         Plan, the Committee will have the authority to determine all provisions
         of Options as the Committee may deem necessary or desirable and as
         consistent with the terms of the Plan, including, without limitation,
         the following: (i) the Eligible Recipients to be selected as
         Participants; (ii) the nature and extent of the Options to be made to
         each Participant (including the number of shares of Common Stock to be
         subject to each Option, the exercise price and the manner in which
         Options will become exercisable) and the form of written agreement, if
         any, evidencing such Option; (iii) the time or times when Options will
         be granted; (iv) the duration of each Option; and (v) the restrictions
         and other conditions to which the Options may be subject. In addition,
         the Committee will have the authority under the Plan in its sole
         discretion to pay the economic value of any Option in the form of cash,
         shares of Common Stock, shares of any capital stock of the Company, or
         any combination of both.

                  (b) The Committee will have the authority under the Plan to
         amend or modify the terms of any outstanding Option in any manner,
         including, without limitation, the authority to modify the number of
         shares or other terms and conditions of an Option,


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         extend the term of an Option, accelerate the exercisability or
         otherwise terminate any restrictions relating to an Option, accept the
         surrender of any outstanding Option or, to the extent not previously
         exercised or vested, authorize the grant of new Options in substitution
         for surrendered Options; provided, however that the amended or modified
         terms are permitted by the Plan as then in effect and that any
         Participant adversely affected by such amended or modified terms has
         consented to such amendment or modification. No amendment or
         modification to an Option, however, whether pursuant to this Section
         3.2 or any other provisions of the Plan, will be deemed to be a
         re-grant of such Option for purposes of this Plan.

                  (c) In the event of (i) any reorganization, merger,
         consolidation, recapitalization, liquidation, reclassification, stock
         dividend, stock split, combination of shares, rights offering,
         extraordinary dividend or divestiture (including a spin-off) or any
         other similar change in corporate structure or shares, (ii) any
         purchase, acquisition, sale or disposition of a significant amount of
         assets or a significant business, (iii) any change in accounting
         principles or practices, or (iv) any other similar change, in each case
         with respect to the Company or any other entity whose performance is
         relevant to the grant or vesting of an Option, the Committee (or, if
         the Company is not the surviving corporation in any such transaction,
         the board of directors of the surviving corporation) may, without the
         consent of any affected Participant, amend or modify the conditions to
         the exercisability of any outstanding Option that is based in whole or
         in part on the financial performance of the Company (or any Subsidiary
         or division thereof) or such other entity so as equitably to reflect
         such event, with the desired result that the criteria for evaluating
         such financial performance of the Company or such other entity will be
         substantially the same (in the sole discretion of the Committee or the
         board of directors of the surviving corporation) following such event
         as prior to such event; provided, however, that the amended or modified
         terms are permitted by the Plan as then in effect.

4.       SHARES AVAILABLE FOR ISSUANCE.

         4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to Section 4.4 below
and adjustment as provided in Section 4.3 of the Plan, the maximum number of
shares of Common Stock that will be available for issuance under the Plan will
be 8,500,000 shares of Common Stock, plus any shares of Common Stock which, as
of the date the Plan is approved by the shareholders of the Company, are
reserved for issuance under the Company's existing Stock Option Plan and which
are not thereafter issued or which have been issued but are subsequently
forfeited and which would otherwise have been available for further issuance
under such plan.

         4.2 ACCOUNTING FOR OPTIONS. Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Options will be applied to
reduce the maximum number of shares of Common Stock remaining available for
issuance under the Plan. Any shares of Common Stock that are subject to an
Option that lapses, expires, is forfeited or for any reason is terminated
unexercised and any shares of Common Stock that are subject to an Option that is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan.


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         4.3 ADJUSTMENTS TO SHARES AND OPTIONS. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such transaction,
the board of directors of the surviving corporation) will make appropriate
adjustment (which determination will be conclusive) as to the number and kind of
securities or other property (including cash) available for issuance or payment
under the Plan and, in order to prevent dilution or enlargement of the rights of
Participants, the number and kind of securities or other property (including
cash) subject to, and the exercise price of, outstanding Options.

         4.4 CVE REQUIREMENTS. So long as the Common Stock of the Company is
listed on the CVE and the Company has not been exempted from the CVE
Requirements the number of shares of Common Stock that may be reserved for
issuance pursuant to the Plan and any other stock option plan, stock purchase
plan or for remuneration for any service performed for or on behalf of the
Company to any one party shall not exceed five percent of the outstanding shares
of Common Stock, on a non-diluted basis;

5.       PARTICIPATION.

         Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of objectives as determined by the Board of the
Company or its Subsidiaries. Eligible Recipients may be granted from time to
time one or more Options as may be determined by the Committee in its sole
discretion. Options will be deemed to be granted as of the date specified in the
grant resolution of the Committee, which date will be the date of any related
agreement with the Participant.

6.       OPTIONS.

         6.1 GRANT. An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion. The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
To the extent that any Incentive Stock Option granted under the Plan ceases for
any reason to qualify as an "incentive stock option" for purposes of Section 422
of the Code, such Incentive Stock Option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.

         6.2 EXERCISE PRICE. The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant; provided, however, that (a) such price will not
be less than 100% of the Fair Market Value of one share of Common Stock on the
date of grant with respect to an Incentive Stock Option (110% of the Fair Market
Value if, at the time the Incentive Stock Option is granted, the Participant
owns, directly or indirectly, more than 10% of the total combined voting power
of all classes of stock of the Company or any parent or subsidiary corporation
of the Company), and (b) such price will not be less than 85% of the Fair Market
Value of one share of Common Stock on the date of


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grant with respect to a Non-Statutory Stock Option. Notwithstanding the
foregoing, so long as the Common Stock of the Company is listed on the CVE and
the Company has not been exempted from the CVE Requirements in this regard, the
exercise price per share of an Option shall not be less than the price per share
permitted by the CVE Requirements.

         6.3 EXERCISABILITY AND DURATION. An Option will become exercisable at
such times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant; provided, however, that no Incentive Stock
Option may be exercisable after 10 years from its date of grant (five years from
its date of grant if, (a) at the time the Incentive Stock Option is granted, the
Participant owns, directly or indirectly, more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company or (b) the Common Stock of the Company is then listed
on the CVE and the Company has not been exempted from the CVE Requirements in
this regard).

         6.4 PAYMENT OF EXERCISE PRICE. The total purchase price of the shares
to be purchased upon exercise of an Option must be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory
note (on terms acceptable to the Committee in its sole discretion) or by a
combination of such methods.

         6.5 MANNER OF EXERCISE. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in the
Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company (Attention: Chief Financial Officer) at its principal
executive office in Lincolnshire, Illinois and by paying in full the total
exercise price for the shares of Common Stock to be purchased in accordance with
Section 6.4 of the Plan.

         6.6 AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which incentive stock options (within the meaning of Section 422 of the Code)
are exercisable for the first time by a Participant during any calendar year
(under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the
Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code
from time to time), such excess Options will be treated as Non-Statutory Stock
Options. The determination will be made by taking incentive stock options into
account in the order in which they were granted. If such excess only applies to
a portion of an Incentive Stock Option, the Committee, in its discretion, will
designate which shares will be treated as shares to be acquired upon exercise of
an Incentive Stock Option.

7.       EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

         7.1 TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT.
Unless  otherwise  provided  by the Committee in its sole discretion in the
agreement evidencing an Option:

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                  (a) In the event a Participant's employment or other service
         with the Company and all Subsidiaries is terminated by reason of death
         or Disability, all outstanding Options then held by the Participant
         will remain exercisable, to the extent exercisable as of the date of
         such termination, for a period of six months after such termination
         (but in no event after the expiration date of any such Option).

                  (b) In the event a Participant's employment or other service
         with the Company and all Subsidiaries is terminated by reason of
         Retirement, all outstanding Options then held by the Participant will
         remain exercisable, to the extent exercisable as of the date of such
         termination, for a period of three months after such termination (but
         in no event after the expiration date of any such Option).

         7.2 TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR RETIREMENT.

                  (a) Unless otherwise provided by the Committee in its sole
         discretion in the agreement evidencing an Option, in the event a
         Participant's employment or other service is terminated with the
         Company and all Subsidiaries for any reason other than death,
         Disability or Retirement, or a Participant is in the employ or service
         of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the
         Company (unless the Participant continues in the employ or service of
         the Company or another Subsidiary), all rights of the Participant under
         the Plan and any agreements evidencing an Option will immediately
         terminate without notice of any kind, and no Options then held by the
         Participant will thereafter be exercisable; provided, however, that if
         such termination is due to any reason other than termination by the
         Company or any Subsidiary for "cause," all outstanding Options then
         held by such Participant will remain exercisable, to the extent
         exercisable as of such termination, for a period of three months after
         such termination (but in no event after the expiration date of any such
         Option).

                  (b) For purposes of this Section 7.2, "cause" (as determined
         by the Committee) will be as defined in any employment or other
         agreement or policy applicable to the Participant or, if no such
         agreement or policy exists, will mean (i) dishonesty, fraud,
         misrepresentation, embezzlement or deliberate injury or attempted
         injury, in each case related to the Company or any Subsidiary, (ii) any
         unlawful or criminal activity of a serious nature, (iii) any
         intentional and deliberate breach of a duty or duties that,
         individually or in the aggregate, are material in relation to the
         Participant's overall duties, or (iv) any material breach of any
         employment, service, confidentiality or non-compete agreement entered
         into with the Company or any Subsidiary.

         7.3 MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the other
provisions of this Section 7, upon a Participant's termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the date of
grant, including following such termination), cause Options (or any part
thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service; provided, however, that no Option may remain exercisable beyond its
expiration date.


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         7.4 EXERCISE OF INCENTIVE STOCK OPTIONS FOLLOWING TERMINATION. Any
Incentive Stock Option that remains unexercised more than one year following
termination of employment by reason of Disability or more than three months
following termination for any reason other than death or Disability will
thereafter be deemed to be a Non-Statutory Stock Option.

         7.5 DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.

8.       PAYMENT OF WITHHOLDING TAXES.

         8.1 GENERAL RULES. The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all foreign, federal, state and local withholding and
employment-related tax requirements attributable to an Option, including,
without limitation, the grant or exercise of an Option or a disqualifying
disposition of stock received upon exercise of an Incentive Stock Option, or (b)
require the Participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Option.

         8.2 SPECIAL RULES. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 8.1 of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or a
promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.

9.       CHANGE IN CONTROL.

         9.1 CHANGE IN  CONTROL.  For  purposes  of this  Section 9, a "Change
in  Control" of the Company will mean the following:

                  (a) the sale, lease, exchange or other transfer, directly or
         indirectly, of substantially all of the assets of the Company (in one
         transaction or in a series of related transactions) to a person or
         entity that is not controlled by the Company;

                  (b) the  approval by the  shareholders  of the  Company
         of any plan or proposal  for the liquidation or dissolution of the
         Company;

                  (c) any person becomes after the effective date of the Plan
         the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
         Act), directly or indirectly, of (i) 20% or more, but not 50% or more,
         of the combined voting power of the Company's outstanding securities
         ordinarily having the right to vote at elections of directors, unless
         the transaction resulting in such ownership has been approved in
         advance by the Continuity Directors (as defined in Section 9.2 below),
         or (ii) 50% or more of the


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         combined voting power of the Company's outstanding securities
         ordinarily having the right to vote at elections of directors
         (regardless of any approval by the Continuity Directors);

                  (d) a merger or consolidation to which the Company is a party
         if the shareholders of the Company immediately prior to effective date
         of such merger or consolidation have "beneficial ownership" (as defined
         in Rule 13d-3 under the Exchange Act), immediately following the
         effective date of such merger or consolidation, of securities of the
         surviving corporation representing (i) more than 50%, but less than
         80%, of the combined voting power of the surviving corporation's then
         outstanding securities ordinarily having the right to vote at elections
         of directors, unless such merger or consolidation has been approved in
         advance by the Continuity Directors, or (ii) 50% or less of the
         combined voting power of the surviving corporation's then outstanding
         securities ordinarily having the right to vote at elections of
         directors (regardless of any approval by the Continuity Directors);

                  (e) the Continuity  Directors  cease for any reason to
         constitute at least a majority of the Board; or

                  (f) any other change in control of the Company of a nature
         that would be required to be reported pursuant to Section 13 or 15(d)
         of the Exchange Act, whether or not the Company is then subject to such
         reporting requirement.

         9.2 CONTINUITY DIRECTORS. For purposes of this Section 9, "Continuity
Directors" of the Company will mean any individuals who are members of the Board
on the effective date of the Plan and any individual who subsequently becomes a
member of the Board whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Continuity
Directors (either by specific vote or by approval of the Company's proxy
statement in which such individual is named as a nominee for director without
objection to such nomination).

         9.3 ACCELERATION OF EXERCISABILITY. Without limiting the authority of
the Committee under Sections 3.2 and 4.3 of the Plan, if a Change in Control of
the Company occurs, then, unless otherwise provided by the Committee in its sole
discretion either in the agreement evidencing an Option at the time of grant or
at any time after the grant of an Option, all outstanding Options will become
immediately exercisable in full and will remain exercisable for the remainder of
their terms, regardless of whether the Participant to whom such Options have
been granted remains in the employ or service of the Company or any Subsidiary.

10.      RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

         10.1 EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.

         10.2 RIGHTS AS A SHAREHOLDER. As a holder of Options, a Participant
will have no rights as a shareholder unless and until such Options are exercised
for, or paid in the form of, shares of


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Common Stock and the Participant becomes the holder of record of such shares.
Except as otherwise provided in the Plan, no adjustment will be made for
dividends or distributions with respect to such Options as to which there is a
record date preceding the date the Participant becomes the holder of record of
such shares, except as the Committee may determine in its discretion.

         10.3 RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Plan (unless approved by the Committee in its sole discretion and the CVE, if
necessary), no right or interest of any Participant in an Option prior to the
exercise of such Option will be assignable or transferable, or subjected to any
lien, during the lifetime of the Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise. A
Participant will, however, be entitled to designate a beneficiary to receive an
Option upon such Participant's death, and in the event of a Participant's death,
payment of any amounts due under the Plan will be made to, and exercise of
Options (to the extent permitted pursuant to Section 7 of the Plan) may be made
by, the Participant's legal representatives, heirs and legatees.

         10.4 BREACH OF CONFIDENTIALITY OR NON-COMPETE AGREEMENTS.
Notwithstanding anything in the Plan to the contrary, in the event that a
Participant materially breaches the terms of any confidentiality or non-compete
agreement entered into with the Company or any Subsidiary, whether such breach
occurs before or after termination of such Participant's employment or other
service with the Company or any Subsidiary, the Committee in its sole discretion
may immediately terminate all rights of the Participant under the Plan and any
agreements evidencing an Option then held by the Participant without notice of
any kind.

         10.5 NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.

11.      SECURITIES LAW AND OTHER RESTRICTIONS.

         Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to issue any
shares of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Options granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable
state or foreign securities laws or an exemption from such registration under
the Securities Act and applicable state or foreign securities laws, and (b)
there has been obtained any other consent, approval or permit from any other
regulatory body which the Committee, in its sole discretion, deems necessary or
advisable. The Company may condition such issuance, sale or transfer upon the
receipt of any representations or agreements from the parties involved, and the
placement of any legends on certificates representing shares of Common Stock, as
may be deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.


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12.      PLAN AMENDMENT, MODIFICATION AND TERMINATION.

         The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the Board
may deem advisable in order that Options under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the shareholders of
the Company if shareholder approval of the amendment is then required pursuant
to Section 422 of the Code or the rules of any stock exchange or Nasdaq or
similar regulatory body. No termination, suspension or amendment of the Plan may
adversely affect any outstanding Option without the consent of the affected
Participant; provided, however, that this sentence will not impair the right of
the Committee to take whatever action it deems appropriate under Sections 3.2,
4.3 and 9 of the Plan.

13.      EFFECTIVE DATE AND DURATION OF THE PLAN.

         The Plan is effective as of December 8, 1998, the date it was adopted
by the Board. The Plan will terminate at midnight on December 8, 2008 and may be
terminated prior to such time to by Board action, and no Option will be granted
after such termination. Options outstanding upon termination of the Plan may
continue to be exercised in accordance with their terms.

14.      MISCELLANEOUS.

         14.1 GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Wyoming, notwithstanding the conflicts of laws
principles of any jurisdictions.

         14.2     SUCCESSORS  AND  ASSIGNS.  The Plan  will be  binding  upon
and inure to the  benefit  of the successors and permitted assigns of the
Company and the Participants.


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