OPTION AGREEMENT

         THIS  AGREEMENT  is made as of the 12th day of November,  1996,  by and
between  Preferred  Telecom,  Inc., a publicly owned Delaware  corporation  with
principal offices at 12655 N. Central Expressway, Suite 800, Dallas, Texas 75243
("Preferred")  and Bisbro  Investments  Company Ltd.,  with an address of PO Box
3216, Safat 13033,  Kuwait city,  Kuwait,  and maintains offices in care of T.R.
Winston & Company  Incorporated,  1999  Avenue of the  Stars,  Suite  1950,  Los
Angeles,  CA 90067  ("Bisbro").  Bisbro and Preferred are sometimes  hereinafter
collectively referred to as the "Parties".

                                    RECITALS

         WHEREAS,  in consideration  for a Loan rendered by Bisbro to Preferred,
Preferred  desires to grant an option  ("Option") to Bisbro to purchase  600,000
shares of Preferred  common stock under the terms and conditions as set forth in
this Option Agreement.

         WHEREAS, in reliance upon the respective representations and warranties
of Preferred and the terms and conditions  hereinafter set forth, Bisbro desires
to purchase,  and Preferred  desires to sell,  under the terms set forth herein,
the number of shares (the "Shares") of common stock of Preferred (the "Company")
desired by Bisbro.

         NOW,  THEREFORE,  in  consideration  of the premises and the respective
covenants hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

         1. SALE AND PURCHASE OF SECURITIES.  Preferred  hereby grants Bisbro or
its  assignee  the Option to purchase up to 600,00  shares of  Preferred  common
stock, based upon an anticipated 2:1 reverse split of existing shares, for three
(3) years  from the date of  execution  hereof,  based upon an  anticipated  2:1
reverse split of existing shares.

         2.  PURCHASE  PRICE.  Preferred  agrees to sell to Bisbro the amount of
shares of Preferred common stock it desires,  at a purchase price on the date of
purchase of fifty cents  (US$.50) per share  ("Purchase  Price"),  based upon an
anticipated 2:1 reverse split of existing  shares.  Funds paid as  consideration
for said  shares  shall be  transferred  on a DVP  basis or by any  other  means
acceptable  to the  parties,  to the account of  Preferred  in  compliance  with
instructions to be provided at the time of purchase.

         3.       EXERCISE OF OPTION.

                  a. Upon  exercise of the option as set forth above,  Bisbro or
its assignee  shall have "piggy back"  registration  rights,  with regard to any
registration of an offering of Preferred securities. Preferred shall give notice
as promptly as possible of any such proposed  registration  to Bisbro,  and will
include the shares of Bisbro upon the same terms of any offering, subject to any
requirements, limitations, and/or lockups of the underwriter, if applicable.


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                  b. Preferred will also timely cooperate with, approve, provide
and/or  deliver  opinions  and all  reasonable  documentation,  and  execute  as
necessary,  any registration  statements and documents  customarily  utilized in
connection  with any sale of its  securities  by Bisbro  (including  any and all
amendments  thereto  including  post-effective  amendments),  standby  or  other
underwriting or selling agreements, instructions to its transfer agent, sales or
transfer documentation reasonably requested by Bisbro or its assignee that shall
be necessary or required to implement Bisbro, or its assignee's sale,  transfer,
pledge or  hypothecation of the shares under the 33 Act, the securities or "blue
sky"  laws of the  various  states  or the rules of any  governing  body  having
jurisdiction thereof.

                  c. Any registration,  sale or  transfer may include, but shall
not be limited to: (i) transactions  made or consummated  under or pursuant to a
Registration  Statement  under the 33 Act on Form S-1, S-2,  S-3, or SB-2;  (ii)
transactions  made or  consummated  under  or  pursuant  to an  exemptions  from
registration  under the 33 Act under  Regulation  A,  Rule 701,  etc.;  or (iii)
private or other sales of the shares and Warrants  under the 33 Act or the rules
or regulations adopted thereunder  including but not limited to Regulation S and
D. In this regard, the Preferred  specifically  covenants and agrees to prepare,
execute and deliver any and all documentation  necessary to cause its securities
counsel o publish  opinions  and deliver  written  instructions  to  Preferred's
transfer  agent  within  ten 910)  business  days  from the date  Bisbro  or its
designee  delivers written request to Preferred for the transfer,  sale,  and/or
removal of  restrictive  legend  (where  applicable)  of or from the  applicable
shares, options or warrants.

         4.       MISCELLANEOUS

                  a. The terms and conditions of this  Agreement  shall inure to
the benefit of and be binding upon the respective successors and assigned of the
parties  hereto.  Nothing in this  Agreement,  express or implied is intended to
confer  upon any party,  other than the  parties  hereto,  and their  respective
successors and assigned,  any rights,  remedies obligations or liabilities under
or by reason of this Agreement, except as expressly provided herein.

                  b.       This Agreement shall be governed by and construed  in
accordance with the laws of the state of Colorado.

                  c.       This  Agreement may be  executed in two  counterparts
via  facsimile,  each of which  shall be  deemed an  original,  but all of which
together shall constitute one and the same instrument.

                  d. The warranties and  representations of Bisbro and Preferred
contained in or made pursuant to this Agreement  shall survive the execution and
delivery of this Agreement and the closing hereunder.

                  e.       Except  as  herein provided,  any  provision of  this
Agreement  may be amended or waived only by a written  instrument  signed by the
parties hereto.

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                  f.       In the event a dispute  arises concerning enforcement
of the terms of this  Agreement,  the prevailing  party shall be entitled to its
costs and attorney fees.

         IN WITNESS  WHEREOF,  the undersigned have hereunto set their hands and
seals as of the date and year first written above.

                                Preferred Telecom Inc.



                                        By:/s/ G. Ray Miller
                                           --------------------------
                                           G. Ray Miller, Chairman, CEO



                                         By:/s/ Dennis L. Gundy
                                            -------------------------
                                            Dennis L. Gundy, President

                                            Bisbro Investments Company, Ltd.



                                          By:/s/ Bader A-Rezaihan
                                             ------------------------
                                             Bader A-Rezaihan
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